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TOPIC 2 THE CONCEPT OF STRATEGY - Coggle Diagram
TOPIC 2 THE CONCEPT OF STRATEGY
WHAT IS STRATEGY?
Porter, 1996
The resulting operational improvements (productivity, quality, speed) have often been
dramatic ...
Nevertheless, many companies have been frustrated by their inability to translate
those gains into sustainable profitability»
«For almost two decades, managers have been learning to play by a new set of rools
(flexibility, outsourcing, benchmarking, ...)
1. OPERATIONAL EFFEXTIVENESS (OE)
means performing similar activities better than rivals perform them:
Refers to any practices that allow a company to better utilize its inputs
Includes but it is not limited to efficiency
Is a necessary but not sufficient condition for sustainable profitability
because of ...
Diffusion of best practices
Competitors can quickly imitate best managerial practices → competitive pressure implies a generalized enhancement of
OE
, but the relative positions of firms do not change
Competitive convergence
Firms’ increasing use of benchmarking makes them more similar over time
2. STRATEGIC POSITIONING
means performing
different
activities
from rivals’ or performing similar activities in
different ways
SOURCES OF STRATEGIC POSITIONING
Need-based positioning
serving most or all the needs of a particular group of customers
Differences in needs will not translate into meaningful positions unless the best set of activities to satisfy them also differs
Access-based positioning
Segmenting customers who are accessible in different ways
Although their needs are similar to those of other customers, the best configuration of activities to reach them is different (es., rural vs. urban-based customers)
Variety-based positioning
Producing a subset of an industry’s products or services
STRATEGY IS THE CREATION OF A UNIQUE AND VALUABLE POSITION, INVOLVING A DIFFERENT SET OF ACTIVITIES