What is Strategy.pptx, Defines of Strategy
- 1. What is Strategy? By Michael E. Porter
- 2. Main Idea: Strategy is about being different. Companies must choose a unique position and perform different activities from rivals or similar activities differently. Example: Southwest Airlines and Ikea – both operate differently from their competitors. Introduction to Strategy
- 3. Operational Effectiveness: Doing similar activities better than rivals (efficiency). Strategy: Performing different activities or similar activities in unique ways. Key point: Operational effectiveness is necessary but not sufficient for sustainable profitability. Operational Effectiveness vs. Strategy
- 4. A company can outperform rivals if it delivers greater value to customers or achieves lower cost. Competitive advantage arises from distinct activities, not just operational effectiveness. Competitive Advantage
- 5. 1.Variety-Based Positioning: Focusing on a specific product/service (e.g., Jiffy Lube). 2.Needs-Based Positioning: Meeting the needs of a specific customer group (e.g., Ikea). 3.Access-Based Positioning: Reaching customers differently due to geographic or other differences (e.g., Carmike Cinemas). Types of Strategic Positioning
- 6. Key Concept: Strategy requires trade-offs; companies cannot be all things to all people. Example: Neutrogena – focuses on high-quality skin- care products, sacrificing volume and variety. The Role of Trade-offs
- 7. Fit ensures that activities reinforce each other, making it harder for competitors to imitate. Example: Southwest Airlines – its low-cost strategy is reinforced by no meals, no seat assignments, and quick turnarounds. Strategic Fit
- 8. Sustainability comes from fit across activities. Example: Ikea’s self-service model aligns with its low- cost strategy and unique customer service model. Sustainability of Strategy
- 9. Summary: True strategy is about making unique choices, trade-offs, and creating a tailored set of activities. Operational effectiveness without strategy leads to competitive convergence. Conclusion