Monday, March 13, 2006

 

What is Strategy?

A part of why I am doing this is to collect and record information and articles that may be of benefit to my coursework and in so doing to be in a position to recall them later quickly, no matter where I am or what I am doing.

I am reading Michael Porter's article "What is Strategy" (Harvard Business Review, Nov 1996): it emphasises the difference between operational effectiveness and strategy, or the creation of "sustainable difference" in the way a company operates. Interesting stuff - particularly where he talks about the need to to organise activities so that they closely "fit" together. It is not a separate activity that creates competitive advantage, it is how well they fit together that creates the difference. He also explains how trade-offs are important in developing a business strategy - the companies that are willing to trade off one advantage to gain a marked advantage in another area are able to defend themselves better against competitors, and to sustain this difference over quite a long period - "strategy renders choices about what not to do as important as choices about what to do".

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