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What is Strategy Notes .docx

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John Young

What is Strategy? Article -how strategy relates to your own resources  Positioning is rejected as too static for today’s dynamic markets and changing technologies  Competit. Advantage is only temporary  Root of problem is failure to distinguish btw operational effectiveness and strategy  OP effectiveness and strategy work in different ways  Op effectiveness means performing similar activities better than rivals perform them o Includes and Not limited to efficiency o Done through TQM, time-based competition, benchmarking, improve customer satisfaction, embrace continuous improvement, change management, learning organization o Outsourcing, virtual organization o Efficiency o Economies of scale  more profitable o Eliminating waste o Pervasive  table stake for being in business  Strategic positioning is performing different activities from rivals’ or performing similar activities in different ways  OE competition shifts productivity frontier outward, effectively raising the bar for everyone  OE is in sufficient, easy to imitate, worse if they are just generic solutions o When everyone in industry is investing in similar tech, no one profits o Competitive convergence: we are imitating our rivals; the more benchmarking companies do, the more they look alike therefore companies merge due to lack of strategic vision (INDUSTRY CONSOLIDATION) o Comps face diminishing returns after gains in operational effectiveness o Process improvements are very easy to copy by others and short term (there’s no point in only pursuing that) SYMPTOMS: Prices will start to decline, diminishing returns  Strategy rests on unique activities vs. your competitors  Strategic positions can be based on customers’ needs (NEEDS-BASED POSITIONING), customers’ accessibility (ACCESS-based positioning…customer geography or scale), or the variety of a company’s products and services (VARIETY-BASED POSITIONING)  Variety and access positioning do not rely on any customer differences, but accompany needs differences  Strategy is the creation of a unique and valuable position, involving a different set of activities. o NO ONE IDEAL POSITION, NO STRATEGY  Sustainable strategic position requires Trade-Offs (they create the need for choice and purposefully limit what a company offers)  Fit drives both comp adv. And sustainability o Strategy is about combining activities o Strategic positions should have a horizon of a decade or more, not of a single planning cycle At manage
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