SI 422SI midterm. Introduction to Strategy

Introduction to Strategy Porterian view What is strategy?  Operational effectiveness: refers to the extent to which a firm performs similar activities better than rivals  Strategy: refers to performing different activities from rivals or performing them in a different way o Choose the right configuration & make the right trade-offs o Rests on unique activities Who wins & why?  Porter believes that firms can achieve competitive advantage only if they have both operational effectiveness & a superior strategy (that fits with demands of the environment)  Long-term organizational (firm) performance depends, to a large degree, on the environment (industry) in which the organization competes What is a strategic activities map?  A picture that identifies the key activities of a firm (tradeoffs & investments) & identifies the linkages b/w them  Can be further linked to costs & customer willingness to pay Grant & Jordan view What is strategy?  Designed to help the firm use its internal resources & characteristics to deal with its industry & competitive environment; all about the fit w/ the firm & its environment  A unifying theme that gives coherence & direction to the actions & decisions of an individual or org What is the difference b/w strategy & tactics?  Strategy is the overall plan for deploying resources to establish a favorable position o Important, involve significant commitment of resources & not easily reversible  Tactic is a scheme for a specific action