What is Strategy.docVIP

What is Strategy? - Reading: Lecture 1 + ‘What’s Strategy’ (focus on Strategic Positioning, competitive advantage, sustainability) General Definition Strategy =A series of goal-directed decisions and actions matching an organization’s skills and resources with the opportunities and threats in its environment SM = Analyze current situation = Develop appropriate strategies = Put strategies into action = Evaluate, modify, or change strategy Porter’s further definition of Strategy – OE vs. Strategy (can relate to MAD SCM-Competitive Advantage) People tend to think (Dynamic market + changing tech) positioning(once the heart of strategy) = rejected b/c market positioning can easily be copied by rivals competitive advantage = temporary HOWEVER, according to Porter, the root of the problem = people confuse Strategy with Operational Effectiveness OE ≠ STRATEGY, both are essential for firm OE Strategy (Strategic Positioning = core!) Concepts Perform similar activities BETTER than rivals -Perform similar activities in a DIFFERENT way or -Perform DIFFERENT activities from rivals’ Tools Management tools: TQM, Benchmarking, time-based competition, outsourcing, etc. -Define a unique position -Make clear trade-offs -Forge fit among activities Features Easy to imitate; Zero relative growth Difficult to imitate; Sustainability of competitive advantage Typical CASE Japanese firms – who however rarely have strategy Southwest airline vs. Continental Lite (Details below) A firm can only outperform rivals when it can establish a DIFFERENCE and that difference can be preserved (sustained). Therefore, OE is necessary but not sufficient. Further explain why OE is necessary but not sufficient OE refers to any number of practices that allow a company to better utilize its inputs by: eliminate wasted effort + employ more advanced tech + motivate employee better + have greater insight into managing particular activities Necessary OE differences are the source of prof