Porter

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Porter

  1. 1. Porter: What is strategy? <ul><li>Operational effectiveness: You perform activities better than your competitors </li></ul><ul><li>Strategy: You perform different activities from your competitors, or the same activities in different ways </li></ul><ul><li>Operational effectiveness is necessary, but not sufficient for long-term success </li></ul>
  2. 2. Porter: What is strategy? <ul><li>Strategy – Importance of uniqueness </li></ul><ul><ul><li>Variety-based positioning = Be unique by having distinctive products or services </li></ul></ul><ul><ul><li>Needs-based positioning = Be unique by targeting a special group of customers </li></ul></ul><ul><ul><li>Access-based positioning = Be unique by reaching your customers in special ways </li></ul></ul>
  3. 3. Porter: What is strategy? <ul><li>Trade-offs = When you choose a particular position, you choose NOT to use other approaches </li></ul><ul><ul><li>These trade-offs are essential and make imitation (straddling) difficult </li></ul></ul><ul><li>Fit = Production, marketing, personnel, etc. should all be consistent </li></ul><ul><ul><li>When all activities work together as a system, imitation is difficult </li></ul></ul>
  4. 4. Porter: Sustained competitive advantage <ul><li>Achievable when you have operational effectiveness AND competitors cannot copy your approach </li></ul><ul><li>Many CEOs don’t have a strategy! </li></ul><ul><ul><li>Afraid of making trade-offs </li></ul></ul><ul><ul><li>Seduced by the concreteness of operational effectiveness </li></ul></ul><ul><ul><li>Tempted to grow by broadening ( growth trap ) vs. deepen position & maintain strategic continuity </li></ul></ul><ul><ul><li>“ Benchmarking best-practices” & “outsourcing” lead to easy imitation… Competitive convergence </li></ul></ul><ul><ul><li>Strong leaders & strong choices are essential </li></ul></ul>
  5. 5. Sustained competitive advantage <ul><li>“ The strategic agenda demands discipline and continuity; its enemies are distraction and compromise” </li></ul><ul><li>What elements would you include in a concept map of Porter’s ideas? </li></ul>

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