What is Strategy
Content
César Rebollar Jiménez
151088
What is Strategy?
For almost two decades, managers have been learning to play by a new
set of rules. Companies must be flexible to respond rapidly to
competitive and market changes.
Operational Effectiveness: Necessary but Not Sufficient
Operational effectiveness and strategy are both essential to superior
performance, wbich, after all, is the primary goal of any enterprise. But
they work in very different ways.
• OE looks at each individual activity a firm performs
• Like development, production, distribution
• And tries to perform those activities better than rivals
A company can outperform rivals only if it can establish a difference that
it can preserve.
• Also, the quest for OE can lead to competitive convergence
• Companies become more and more alike, which makes it harder to
stay ahead
Competitors can quickly imitate management techniques, new
technologies, input improvements, and superior ways of meeting
customers' needs.
Strategic Positioning
Competitive strategy is about being different.
The essence of strategy is choosing to perform activities differently than
rivals do.
Strategic positions can be based on customers' needs, customers'
accessibility, or the variety of a company's products or services.
Types of Strategic Positioning
• Variety-Based
– When a firm chooses to produce only a subset of
products/services compared to competitors
• Needs-Based
– Targeting only a segment of customers but serving most of their
needs
• Access-Based
–
Segmenting customers, for example geographically, etc.
Strategy reduces to OE only if there is no need for positioning
Imitation
Matching: When a competitor imitates your strategic position
Straddling: When a competitor imitates only the successful aspects
of your strategic position.
Fit
Definition: Fit is how different activities within a firm complement and
reinforce each other.
Fit can create value by exploiting the complementarities that exist among
different activities through:
1. Creating consistency between activities and the overall strategy of the
firm
2. Activities reinforcing each other
3. And optimizing effort: eliminating redundancy across activities, fostering
information exchange, increasing coordination.
• Fit can create trade-offs and make imitation harder for competitors
• Trade-offs create barriers to imitation
• Barriers to imitation lead to Sustainable Competitive Advantage
151088
What is Strategy?
For almost two decades, managers have been learning to play by a new
set of rules. Companies must be flexible to respond rapidly to
competitive and market changes.
Operational Effectiveness: Necessary but Not Sufficient
Operational effectiveness and strategy are both essential to superior
performance, wbich, after all, is the primary goal of any enterprise. But
they work in very different ways.
• OE looks at each individual activity a firm performs
• Like development, production, distribution
• And tries to perform those activities better than rivals
A company can outperform rivals only if it can establish a difference that
it can preserve.
• Also, the quest for OE can lead to competitive convergence
• Companies become more and more alike, which makes it harder to
stay ahead
Competitors can quickly imitate management techniques, new
technologies, input improvements, and superior ways of meeting
customers' needs.
Strategic Positioning
Competitive strategy is about being different.
The essence of strategy is choosing to perform activities differently than
rivals do.
Strategic positions can be based on customers' needs, customers'
accessibility, or the variety of a company's products or services.
Types of Strategic Positioning
• Variety-Based
– When a firm chooses to produce only a subset of
products/services compared to competitors
• Needs-Based
– Targeting only a segment of customers but serving most of their
needs
• Access-Based
–
Segmenting customers, for example geographically, etc.
Strategy reduces to OE only if there is no need for positioning
Imitation
Matching: When a competitor imitates your strategic position
Straddling: When a competitor imitates only the successful aspects
of your strategic position.
Fit
Definition: Fit is how different activities within a firm complement and
reinforce each other.
Fit can create value by exploiting the complementarities that exist among
different activities through:
1. Creating consistency between activities and the overall strategy of the
firm
2. Activities reinforcing each other
3. And optimizing effort: eliminating redundancy across activities, fostering
information exchange, increasing coordination.
• Fit can create trade-offs and make imitation harder for competitors
• Trade-offs create barriers to imitation
• Barriers to imitation lead to Sustainable Competitive Advantage
