What is Strategy? - Porter (1996)............................................................................................. 2
Firm resources and sustained competitive advantage - Barney (1991)....................................4
The core competence of the corporation - Prahalad and Hamel (1990)...................................5
Upper echelons: the organisation as a reflection of its top managers - Hambrick and Mason
(1984)........................................................................................................................................6
The ambidextrous organisation - O’reilly and Tushman (2004)................................................ 7
, What is Strategy? - Porter (1996)
Operational effectiveness is not strategy
- Both essential to superior performance, but work in different ways
- Company can only outperform rivals if it can establish a preservable difference
- Must deliver greater value to customers or lower costs
- Greater value → higher prices
- Greater efficiency → lower prices
- Differentiation arises from choice of activities and how they are performed
- Operational effectiveness vs strategy
- Operational effectiveness: performing similar activities better than rivals →
important source of differences in profitability among competitors
- Strategic positioning: performing different activities or similar activities in
different ways compared to rivals
- OE constantly raises the bar of maximum deliverable value possible, is not sufficient
- Competitors can quickly imitate improved practices
- Imitating companies = companies become more alike
- Competition based only on operational effectiveness leads to mutual
destruction
Strategy rests on unique activities
- Competitive strategy = deliberately choosing a different set of activities to deliver a
unique mix of value
- Essence of strategy is choosing to perform different activities than rivals
- Types of strategic positions
1. Variety-based positioning → based on producing a subset of industry's
products or services
2. Needs-based positioning → serving most or all the needs of a particular group
- Groups with different needs → tailored set of activities
- Could also be one customer having different needs on different
occasions
3. Access-based positioning → segmenting customers who are accessible in
different ways
- Ex. Carmike Cinemas only operates in cities with populations under
200,000)
- What is strategy? → Strategy is the creation of a unique and valuable position,
involving a different set of activities
A sustainable strategic position requires trade-offs
- Strategic position is not sustainable unless there are trade-offs with other positions
- Trade-offs occur when activities are incompatible, more of one things means
less of another
- Create the need for choice and protect against repositioners and straddlers
- 3 reasons for trade-offs
1. Avoiding inconsistencies in image or reputation
2. Arise from activities themselves → different positions require different skills,
equipment, behaviour, etc
Firm resources and sustained competitive advantage - Barney (1991)....................................4
The core competence of the corporation - Prahalad and Hamel (1990)...................................5
Upper echelons: the organisation as a reflection of its top managers - Hambrick and Mason
(1984)........................................................................................................................................6
The ambidextrous organisation - O’reilly and Tushman (2004)................................................ 7
, What is Strategy? - Porter (1996)
Operational effectiveness is not strategy
- Both essential to superior performance, but work in different ways
- Company can only outperform rivals if it can establish a preservable difference
- Must deliver greater value to customers or lower costs
- Greater value → higher prices
- Greater efficiency → lower prices
- Differentiation arises from choice of activities and how they are performed
- Operational effectiveness vs strategy
- Operational effectiveness: performing similar activities better than rivals →
important source of differences in profitability among competitors
- Strategic positioning: performing different activities or similar activities in
different ways compared to rivals
- OE constantly raises the bar of maximum deliverable value possible, is not sufficient
- Competitors can quickly imitate improved practices
- Imitating companies = companies become more alike
- Competition based only on operational effectiveness leads to mutual
destruction
Strategy rests on unique activities
- Competitive strategy = deliberately choosing a different set of activities to deliver a
unique mix of value
- Essence of strategy is choosing to perform different activities than rivals
- Types of strategic positions
1. Variety-based positioning → based on producing a subset of industry's
products or services
2. Needs-based positioning → serving most or all the needs of a particular group
- Groups with different needs → tailored set of activities
- Could also be one customer having different needs on different
occasions
3. Access-based positioning → segmenting customers who are accessible in
different ways
- Ex. Carmike Cinemas only operates in cities with populations under
200,000)
- What is strategy? → Strategy is the creation of a unique and valuable position,
involving a different set of activities
A sustainable strategic position requires trade-offs
- Strategic position is not sustainable unless there are trade-offs with other positions
- Trade-offs occur when activities are incompatible, more of one things means
less of another
- Create the need for choice and protect against repositioners and straddlers
- 3 reasons for trade-offs
1. Avoiding inconsistencies in image or reputation
2. Arise from activities themselves → different positions require different skills,
equipment, behaviour, etc
