Novatek Electronics Ltd. is a leading manufacturer of smart home appliances and planned to expand into Tier-2 cities, invest in AI-enabled products,…

The case demonstrates that strategy is partly proactive and partly reactive because it combines deliberate plans with responses to unforeseen developments. Proactive Strategy: Novatek's decision to expand into Tier-2 cities, invest in AI-enabled products, strengthen its dealer network and increase exports represents its proactive strategy. These are planned initiatives designed to achieve long-term objectives and build competitive advantage. Reactive Strategy: The company also faced unexpected environmental changes, such as the entry of a foreign competitor with low-priced products, rising raw material prices and stricter energy efficiency regulations. In response, Novatek introduced budget friendly product variants, changed its sourcing strategy and accelerated the development of energy efficient products. These actions represent its reactive strategy, undertaken to address emerging challenges. So, the case highlights that an organisation's realised strategy is a blend of proactive (deliberate) actions and reactive (adaptive) responses. While proactive strategies help achieve planned objectives, reactive strategies enable the organisation to adapt to changes in the business environment and sustain its competitive position.