The concept of purchasing policy and strategy is central to understanding of the process of strategic management. The term strategy emanates from a Greek word ‘ strategos’ , which means generalship – the actual direction of a military force as distinct from the policy governing their deployment. The word literally means the art of the general. Strategy begins with a concept of how to use the resources of a firm more effectively in the changing environment. It is similar to the concept in sports called “ game plan” e.g. before a team goes into the field, effective coaches examine a competitor’ s past plans, strengths and weaknesses. The objective is to win the game with minimum injuries; coaches may also not wish to use all their best players but to save some for the future opponents. So coaches devise a plan to win a game.