What Is Strategy? Essay

337 WordsJul 13, 20132 Pages
What Is Strategy? By Michael Porter Strategy means having a sustainable competitive advantage through having a fit that combines several aspects of a business into a system of activities that enhance and complement each other. It is not enough to focus on operational effectiveness and only trying to improve that part of the business using the tools that are usually used, such as TQM and benchmarking. Although certain innovations and changes may be made to eliminate waste and create more efficiency, this move may also foster more competition and may not be a sustainable solution, especially if competitors adopt the same methods. Strategic positioning and differentiation can prove more beneficial than improving operational effectiveness through conventional means but this may also be prone to repositioning and straddling by competitors. Choosing a trade-off and having a sustainable fit that works for the business aids a great deal in developing a sustainable strategy. Deciding on what goods or services to offer and what market segment to serve would mean forgoing providing other types of goods or services or customers. This trade-off forfeits some things but it also gives a clearer organizational goal and a better quality of goods or services. Establishing a system of activities would enable a business to attain a unique advantage that would be difficult for competitors to imitate. I believe that managers should focus on what strategy they are to use for the business rather considering the market and what other competitors are doing. They should also think in terms of sustainable profitability and less of short-term growth as an end of itself. In today’s market, harsh competition drives managers to focus on industry averages and standards to improve their performance. In most industries, especially in one that have inherently homogenous products or services, they

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