What I learned today - What is Strategy?

After carefully reading this article 'What is strategy?' by Michael Porter, I came to realized why Michael Porter is Michael Porter.

This is the one of the few best business writings that I ever read. It opened my eyes to the real world of 'business strategy.'

Summary:

- Activities are the basic units of competitive advantages. Advantage or disadvantage results from all a company's activities, not only a few.

- Strategic positioning means performing different activities from rivals' or performing similar activities in different ways.

- Productivity fronter & competitive convergence

- The essence of strategy is in the activities - choosing to perform activities differently or to perform different activities than rivals. Otherwise, a strategy is nothing more than a marketing slogan that will not withstand competition.

- Strategy is the creation of unique and valuable position, involving a different set of activities. The essence of strategic positioning is to choose activities that are different from rivals.

- Three sources of strategic positions are A.variety-based positioning, B Needs-based positioning, and C. Access-based positioning

- Strategic position is not sustainable unless there are trade-offs with other positions. Trades-offs create the need for choice and protect against repositioners and straddlers

- Strategy is making trade-offs in competiting. The essence of strategy is choosing what not to do.

- Strategy is about combining activities. Fit locks out imitators by creating a chain that is as strong as its strongest link

- There are three types of fit among activities: simple consistency, reinforcing activities, and optimization of effort

- Competitive advantage grows out of the entire system of activities

- In competitive companies, it can be misleading to explain success by specifying individual strengths, core competencies, or critical resources

- Strategy is creating fit among a company's activities. If there is no fit among activities, there is no distinctive strategy and little sustainability

- The desire to grow has perhaps the most perverse effect on strategy

- Approach to sustainable growth is to concentrate on deepening a strategic position rather than broadening and compromising it

- General management is more than the stewardship of individual functions. Its core is strategy: defining and communicating the company's unique position, making trades-offs, and forging fit among activities

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Regards,
Dohyoung Kim