2: Spell them
3: Blend them together to make words
4: Break down words into their spellings
S is for Synthetic phonics.
Children are taught 40-odd sounds (phonemes) and the main ways they are represented. They are shown how to "decode" simple texts by sounding out words into individual phonemes - c-a-t, sh-ee-p - then blending them into a word: cat, sheep. Advantages: systematic; it helps with the teaching of spelling.
Disadvantages: learning sounds can be boring; early reading material is limited to dreary "cat on mat" stuff
A is for Analytic phonics. Children are encouraged to read for meaning, using a variety of strategies, including noticing how patterns of sound can be reflected in patterns of letters, e.g. l-ick, th-ick, st-ick. The phonics comes out of the reading, not the other way about.
Advantages: early reading material not so restricted Disadvantages: it can be haphazard; it leaves too much to chance.