Strategy: a company"s action plan for outperforming its competitors and achieving superior profitability. A company must differentiate its strategy from its rivals by doing what they cannot do or improving on what they are doing. A strategy should provide direction and guidance in terms of what the company. Changing circumstances and ongoing management efforts to improve the strategy cause a company"s strategy to evolve over time a condition that makes the task of crafting strategy a work in progress not a one-time event. A company"s strategy is shaped by management analysis and choice and partly by the necessity of adapting and learning by doing. Proactive: planned initiatives to improve the company"s financial performance and secure a competitive edge. Reactive: responses to unanticipated developments and fresh market conditions. Deliberate strategy: consists of proactive strategy elements that are both planned and realized as planned. Emergent strategy: consists of reactive strategy elements that emerge as changing conditions warrant.