Confusing the two is a dangerous mistake. Not understanding the difference typically leads to tactics with no strategy. Tactics will then often conflict with the implicit strategy. Yet, these are very common mistakes that I come across regularly. Most people understand that strategic means long term and tactical means short term, but little else.
A good place to start in understanding the difference is at the source: the military. In general, the military defines strategy as “planning and directing movements and operations.” Tactics are defined as “maneuvering forces in battle.” So, in general, think of strategy as defining the goal and setting the plan. Think of tactics as defining the methods of execution.
For example, Applied Materials’ strategy, set in the early eighties, was to become a broad line supplier of semiconductor equipment. Eaton, Perkin Elmer, and General Signal had the same strategy. The difference was in tactics. These latter companies chose acquisitions as their tactics. Applied’s tactics were to provide a total solution: instead of selling tools, they sold reproducible films and etched films with processes that were easy to integrate; they made it easy to buy from them; they focused on the quality issues all suppliers had; and they built the best support network. Applied’s tactics show a subtle difference in the understanding of the strategy. The others saw the execution of the strategy as collecting a set of technologies under one umbrella. Applied’s solution strategy was based on the emerging trend of technology not being the overriding decision factor. Fabs were getting too expensive and too costly to run. Delivering consistent results with an easy production ramp would be far more important. So Applied’s true strategy was to become a broad line supplier of solutions.
There should be a consistent layering of strategy and tactics across the command chain. In business, a CEO’s tactics becomes the strategy of the COO, the COO’s tactics becomes the strategies of the vice presidents, and so on down to the lowest levels. In this way, strategy and tactics permeate all parts of an organization, not just marketing. In expanding on Applied’s strategy, at the highest level it was to be a broad line equipment supplier. The tactics were to enter flanking equipment markets that complemented its technology base in Epitaxy. So it entered etch and then CVD. The strategy for executing these tactics was to provide solutions. The tactics were to develop repeatable films. The strategy was to wrap these films in equipment they could sell, because no one would pay for a film. And so on. Because the others didn’t layer their strategy and tactics to this level, they lost and Applied became the world’s largest equipment supplier. Novellus was successful, because they countered Applied’s strategy with an equipment strategy that was well layered. To understand the importance of proper strategy and tactics realize that Novellus was just a start-up. Yet it was successful in an area where multi-billion-dollar companies failed in an era where the largest equipment companies were in the hundred million dollar range. TEL was successful because its strategy was to provide extremely reliable equipment and being extremely flexible to deal with. You could always have it your way at TEL. Its tactics were to proliferate this globally.
Marketing differs from other areas in an organization in that it has clear strategic and tactical components. Plus, defining and balancing them is much more critical.
Strategic marketing includes business model development, market selection, product development, and positioning. Some may wince at putting product development here, but Bob Graham always said that R&D was a tactical arm of strategic marketing. It is for this reason that a lot of strategic marketing is done by the CEO and sometimes it is pushed over to R&D. When product development is done by R&D, it is critical that they understand and execute on the principles of strategic marketing. Otherwise, you get colossal failures like Xerox’s PARC, which developed the core IT for the PC revolution but could not monetize it because there was no alignment to Xerox’s products and customers. They could not execute their developments tactically because Xerox’s business strategy was in document management, not computing. Some of the best strategic marketing people of the modern era in equipment from a product development perspective have been Alain Harrus, Richard George, Lou Steen, Tom Newsom, Sass Somekh, and Martin van den Brink. Business model development is usually the CEO’s job. Alex d’Arbeloff, Art Del Prado, Scott Kulicke, Patrick Lam, Ken Levy, and Jim Morgan are the real masters to study here.
Tactical marketing includes advertising, general marcom, and sales support. Positioning strategies should drive advertising and marcom tactics. Product development strategies should drive sales support tactics. A classic example of how this plays out is in Agilent’s single-scalable-platform strategy. Their strategy was to allow the customer to deal with the complexity of SOC testing with a single tester platform. This brought huge test floor management advantages. The outcome was their “single-scalable-platform” positioning strategy. Agilent then hammered this home tactically with advertising, marcom, and sales support work that systematically showed a broader range of parts and applications that the tester could be used for.
