This document discusses the key principles of strategy. It states that operational effectiveness alone is not a strategy and that strategy requires unique activities that create a sustainable strategic position through necessary trade-offs. It also discusses that competitive advantage and sustainability come from achieving a strategic fit among a company's activities through consistency, optimization of efforts, and reinforcing activities. The document notes common strategy problems such as misguided views of competition, failure to choose by not making trade-offs, and getting trapped by only focusing on growth. It advocates for profitable growth by leveraging a unique existing activity system and the important role of leadership in defining and communicating the strategy.

1. What is strategy ?
MICHAEL E.
Presented By:
Ashmita K.C.
Manika Shrestha
Sujana Gurung

2. I. Operational Effectiveness Is Not Strategy
II. Strategy Rests on Unique Activities
III. A Sustainable Strategic Position Requires Trade-offs
IV. Fit Drives Both Competitive Advantage And Sustainability
V. Rediscovering Strategy

3. Strategy

4. Principles
 Creation of a unique and valuable position
 Requires you to make trade-offs in competing
 Involves creating “fit” among a company’s activities

5. Operational Effectiveness Is Not
Strategy

6. THE TWO NECESSARY ELEMENTS
FOR SUPERIOR PERFORMANCE
Operations Effectiveness
Competitive Strategy

7. OPERATIONS EFFICIENCY
Performing similar activities better than rivals
Productivity Frontier

8. Operation Efficiency is important
but it is not sufficient

9. Strategy rests on Unique Activities
Competitive
Strategy is
about being
different

10. Origin of Strategic Position
Variety-Based Positioning
Need-Based Positioning
Access-Based Positioning

11. Variety-Based Positioning
Serving few need of
many customer

12. Need-Based Positioning
iKEA

13. Access-Based Positioning
Serving broad needs
of many customers at
narrow market

15. A sustainable strategic position requires…..
TRADE-OFF

16. Repositioning

17. Straddling
Seeks to match the benefits of successful position,
maintain its existing position

18. Trade Offs arises of three reason
Inconsistence on image or reputation
Different positions require different machinery,
people, systems
Limits on internal coordination and control

19. Strategic FIT
Creating fit between a company’s activities doing
many things well in an integrated way

20. THREE TYPES OF FIT
Simple
Consistency
Optimization
of Efforts
Reinforcing
Activities

24. Rediscovering Strategy
Strategy Problems:
I. Misguided view of competition
II. The Failure to Choose
III. The Growth Trap

25. Misguided view of competition
Forecast of hyper competition, imitating everything
about the competitors

26. The Failure to Choose
“Best-practice “mentality of the managers
Making no trade-offs,

27. The Growth Trap
 Extending the product line, adding new features, imitating
competitors’ popular service, matching processes, and
making acquisitions
 Blur uniqueness, creates compromises, reduces fit, and
ultimately undermines competitive advantage

28. Strategy Solution
I. Profitable Growth
I. The Role of Leadership

29. Profitable Growth
Leveraging the existing activity system by offering
features or service that rivals would find impossible or
costly to match on stand-alone basis

30. The Role of Leadership
Defining and communicating
Leader must provide discipline

32. Any Question?