What is Strategy

1. WHAT IS STRATEGY? Strategy is the creation of a unique and valuable position, involving a different set of
activities such as
– Few needs many customers
– Broad needs of new customers
– Broad needs of many customers in a narrow market
 Operating effectiveness is not strategy
– Operational efficiency includes delivery of greater efficiency, lowering average unit cost,
performing similar activities better than competitors.
– Whereas strategic positioning includes delivery of great values, charging higher average unit
price by improving its quality and performance of different activities as from competitor or
performing similar activities in different ways.
 What strategy is all about?
– Being different from competitors.
– Choosing a different set of activities to deliver unique mix of values.
– Choosing to perform activities differently from competitors.
– Creation of unique and valuable position involving different set of activities

2.  Origin of strategic positioning
– Variety based positioning
– Need based positioning
– Access based positioning
 A sustainable advantage cannot be guaranteed by simply choosing a unique position.
 Competitors will initiate a valuable position in one of following ways
– Choose to reposition itself to match the superior performer
– Seek to match the benefits of a successful position while maintaining its existing positions.
– To become sustainable in strategy one must have trade offs with other positions.
A sustainable strategy requires trade-offs (compromise)
(A trade offs means that more of one thing necessitates less of another)

3. HOW MANAGERS THINK ABOUT COMPETITION?
The worst error in strategy is to compete with rivals in the same dimensions.
COMPETING TO BE THE
BEST
COMPETING TO BE
UNIQUE