What Is Strategy?

What is strategy? prof Umberto Garfagnini ITAM January 26, 2012 Professor Umberto Garfagnini (ITAM) Lesson 4: What is Strategy? January 26, 2012 1 / 14 Outline of Lesson operable E?ectiveness useable E?ectiveness vs Strategy Strategic Positioning Required reading: Michael Porter, What is Strategy?, Harvard commerce Review, Nov/Dec, Vol. 74, Issue 6, 61-78 Professor Umberto Garfagnini (ITAM) Lesson 4: What is Strategy? January 26, 2012 2 / 14 Strategy swallow from last class that Strategy is a theory about(predicate) how to generate a competitive value Competitive advantage is valuable ONLY if it is sustainable Professor Umberto Garfagnini (ITAM) Lesson 4: What is Strategy? January 26, 2012 3 / 14 Operational E?ectiveness Think about a ?rm as performing several activities: For example, developing, producing, selling a product, etc. De?nition: Operational e?ectiveness (OE) means performing the same activities that rivals perform entirely in a break-dance way OE can attach competitive advantage in two ways: 1 producing better products than rivals (product di?erentiation) reducing costs (cost leadership) 2 ...

but OE doesnt mean that a ?rm has a strategy Professor Umberto Garfagnini (ITAM) Lesson 4: What is Strategy? January 26, 2012 4 / 14 Can Operational E?ectiveness Guarantee a Sustained CA? No! OE is usually necessary but not su?cient OE aims at do a better use of a ?rms resources (recall the engineering science approach!) ...but OE alone is not enough to sustain CA Most likely, the CA will only be brief Why? Because competitors can imitate successful innovations whether technological or operational Also, the quest for operational e?ectiveness leads to competitive crossing That is, companies become more and more alike which makes it harder and harder to stay ahead Professor Umberto Garfagnini (ITAM) Lesson 4: What is Strategy? January 26, 2012 5 / 14 Example: Japanese... If you want to shorten a full essay, order it on our website: Ordercustompaper.com

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