What are tactics in business and why are they useful?

By Indeed Editorial Team

Published 8 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organisations deal with evolving economies and landscapes, and tactics in business operations can help them navigate times of change. Executives and managers frequently plan and execute these tactics to develop and support the business's overall strategy. Learning about business tactics can help your professional development as you apply these concepts in real life. In this article, we discuss the definition of business tactics, compare strategies and tactics and provide conceptual information regarding the topic to help you develop your professional knowledge.

What are tactics in business?

Tactics in business are small plans or micro-strategies that help develop an organisation's operations. Generally, they're more actionable plans that support the overall business strategy. They're more specific and deal with more technical information to help team members carry out the vision executives set for the organisation. People in managerial positions may implement specific, measurable, achievable, relevant and time-based (SMART) goals to create effective business tactics, which allows managers to tailor their tactics to suit specific company operations within a timeframe.

Strategy vs tactics

In business terminology, strategies and tactics can be interrelated, and organisations often pair the two terms together. There are some important distinctions between them and it's helpful to know what the difference is to develop your business knowledge. The fundamental difference between business strategies and tactics is that strategies refer to the long-term development of the organisation and the broad goals it wants to achieve, whereas tactics relate to the smaller micro-strategies that managers use to execute the larger organisational strategy. For example, you can think of tactics as the building blocks of an organisation's infrastructure.

Whilst organisations generally focus on long-term growth and expansion of operations, they take advantage of short-term opportunities to achieve success in the long term. Companies may experience setbacks to their overall strategy, which is why it's essential to have flexible tactics and fail-safes. Experiencing setbacks is a natural part of business operations. Business tactics help teams navigate these situations to adapt to their circumstances. The business ecosystem constantly evolves and adapts. Organisations frequently evaluate and analyse their competitors and industry positions.

The traits of business tactics

Creating efficient and specific business tactics is vital to developing and growing a company's overall business strategy and growth. Therefore, it may be beneficial to learn about the different traits of business tactics to implement them in real-life scenarios. Here are the four characteristics of tactics:

Adaptable

Society changes fast and businesses exist within those same ecosystems, which requires flexibility and adaptation. There may be instances where competitors create plans to capture a larger market share and it's ideal for an organisation to prepare for those circumstances. Having adaptable tactics can help an organisation react to situations and opportunities appropriately. To achieve this adaptability, people who create tactics are actively involved with the daily business. If they're not, the gap between the company and its competitors may grow.

Risk management

People may think that tactics are ways for an organisation to scout out and take advantage of opportunities, but there are many uses for business tactics, such as reactionary, defensive or proactive. Some tactics allow businesses to set up measures for risk management to protect their operations from both external and internal threats. These defensive tactics may include performing regular competitor analysis, scouting out industry or market trends or ensuring departments stay focused on business priorities.

Related: How to perform a risk analysis (with tips)

Specific and time-based

Since tactics focus on more specific matters regarding a business's operations, following the SMART planning methodology may be wise. The SMART methodology helps business managers create and set more specific and actionable goals and tactics. Here's what the acronym stands for:

  • Specific: You want business tactics to be as specific and informative as possible to help team members understand those tactics and their objectives. Specific tactics ensure that everyone involved can focus on their own tasks and understands the expectations involved.

  • Measurable: A tactic with a measurable result and key performance indicators (KPIs) helps team members and managers evaluate its success. Measurable indicators also help managers make changes and adaptations depending on a tactic's success or lack thereof.

  • Achievable: A tactic that's too ambitious can decrease team morale, as the team may feel like they're contributing to an impossible task. Creating an attainable tactic helps employees work incrementally towards developing the organisation and provides them with positive reinforcement.

  • Relevant: Irrelevant tactics distract team members from contributing to more impactful actions. A relevant tactic focuses on efficiently producing results that develop and support business operations.

  • Time-based: Tactics with timeframes allow departments to create a schedule and organise their workflow to produce the end results within the given time. Time-based tactics grant team members more focus, as they can conceptualise when they are to complete their tasks.

Related: How to develop SMART goals

Be more transparent with competitors

Since strategies are long-term objectives that an organisation works towards, they may not be apparent to competitors or the general public. Tactics are more focused and transparent endeavours that other companies can identify and analyse. For example, a company's competitor may reduce the prices of its products. In response, the company devises a tactic to add more value to its products to justify its higher price point.

Where do businesses use tactics?

Businesses use tactics to support and develop their overall strategy. Modern-day organisations are multifaceted and have many aspects to consider regarding their operations and long-term strategy. To compartmentalise these multiple business aspects, executives and managers may develop specific tactics to achieve their longer-term goals. Here are five areas in which businesses use tactics:

Product development

In today's business economy, organisations constantly research and develop new products or services to keep the attention of their existing customers and attract new ones. All businesses have a broad strategy of achieving financial growth and capturing a larger market share, but the tactics they plan and execute to achieve growth may differ significantly. For example, Microsoft's strategy was to become the industry leader in the computing and Internet industry. To accomplish that, the company focused on developing a comprehensive operating system that computer manufacturers could use as the default system on their hardware.

Pricing consideration

Sometimes having lower prices than competitors may not benefit a company's business model. There are many tactics in business that target consumers' psychological tendencies to create reputations of luxury. Some companies may choose to keep their prices high and others may choose to keep their inventory in short supply to increase demand and exclusivity. Alternatively, new companies in an industry may operate at a loss to provide customers with very low prices. Some companies may also experiment with pricing tactics to determine how much their consumer base is willing to spend and evaluate their products' value.

Marketing techniques

Organisations spend a lot of time and resources planning and executing intricate marketing plans. Effective marketing deploys many small-scale tactics to achieve larger objectives. These objectives may include attracting new customers, increasing web traffic and exposure, advertising a new product or generating extra revenue from additional streams. For example, a company may create merchandise and other quirky gadgets to help increase exposure to its brand and develop its reputation as a marketing tactic.

Related: 10 positions in marketing (with duties and salary info)

Operational efficiency

Organisations are always looking to streamline operations, increase profits and reduce operational costs. To do this, managers and executives carefully evaluate and analyse areas of contention that they can change. Streamlining operations involves different dynamic parts and may require collaboration between multiple departments to devise a sound tactic to support and develop these areas. A few examples of tactics to help with business operations include changing manufacturers to reduce production costs, hiring specialists to tackle areas of weakness and investing in new facilities to improve work environments.

Related: 14 essential operational manager skills

Investment opportunities

The role of a financial analyst or consultant is to provide businesses with comprehensive reports on potential investment opportunities or potential areas of expansion. In the case of a company directly involved in the financial sector, such as a hedge fund, a primary business tactic is scouting out new investment opportunities and acquisition targets or rearranging financial structuring to generate more revenue. Larger organisations frequently acquire newer companies with growth potential to have an aspiring and ambitious portfolio that adds value to society and helps the organisations grow.

Related:

  • What are business operations and how can you use them?


Explore more articles