What is Strategy?

By Olivier Palacios Vzquez

The strategic positioning proposed by Michael Porter is highly based on gaining competitive
advantage, keep it up and overall drawing on it to transfer differentiation offered by company to
final customers, its attributes and value features.
Porter propose differentiation is not only encouraged by design, production, selling and
distribution but innovating on competitors strategies to achieve offer variety and make
companys products look attractive through self-innovation.:
Also, suggest three facts which must bear in mind to achieve strategic positioning:

By creating unique value position, in which strategic position is coming :

o By serving few needs of many customers
o By serving broad needs of few customers
o By serving broad needs of many customers in a narrow market

To make trade-offs in competingto choose what not to do.

Creating fit among a companys activities.

An important issue is that employees need guidance about how to deepen a strategic position
rather than broaden or compromise it. This work of deciding which target group of customers
and needs to serve requires discipline, the ability to set limits, and forthright communication.
Clearly, strategy and leadership are inextricably linked.
Operational effectiveness and strategy are both essentials to superior performance, but are two
different areas.
Operational effectiveness (OE): means performing similar activities better than rivals perform
them. It includes efficiency, but is not limited to it. It refers to any number of practices that allow
a company to better utilize its inputs by reducing defects in products or developing better
products faster for example.

In contrast strategic positioning means performing different activities from rivals or performing
similar activities in different ways.

Operational Efficiency leads to cost advantage: Cost is generated by performing activities, and
cost advantage arises from performing particular activities more efficiently than competitors. All
differences between companies in cost or price derive from the hundreds of activities required
to create, produce, sell and deliver their products or services, such as calling on customers,
assembling final products and training employees.

Operational Efficiency can both reduce costs and increase differentiation: Thus, differences in
OE are an important source of differences in profitability among competitors because they
directly affect relative cost positions and levels of differentiation.

Literature
Porter, M. E. (2000). What's Strategy? Harvard Business Review.