SUMMARY OF ARTICLEWhat is Strategy? By Michael.E.Porter

MBA ProgramFall 2014

Submitted ToInstructor Iqbal Mehmood

ByDaneyal MirzaL1F14MBAM7012

What is strategy? Is a question many management gurus tried to explain but failed, but this article of Michael Porter comprehends the complexity of the term strategy and explains the ever arduous and strenuous phenomenon strategy quite potently in a manner that all modest learners of management can easily extrapolate.

He starts by pounding the old mantra of Operational Efficiency and calling it deficient and inadequate to be the only choice to competitive advantage. OE is all about benchmarking competition, absorbing best drills, refine productivity and constitute efficiency. OE emphasizes on pulling off activities in a better, outmatched, transcended way. Porter calls for pursuing constant variation and remodeling to be classified as flexible or fluid which is of utmost importance in todays ever elastic business environment. The problem in OE starts when it reaches the very heights which is termed as Productivity Frontier, which encompasses the use of the outclasses practices by all of the players in the market hence putting everybody on the same page and in more financial terms, the profits die out due the indistinguishable ways of getting efficiency between the players. Hence making them look-alikes of each other leading to nowhere. Therefore giving strength to the argument of the inadequacy of OE being the only way to gain advantage.

Whereas porter enforces the use of Competitive Strategy for sustainable advantage because its all about being the most distinct, novel and non-identical. Therefore making the players commit things in a very distant way to others or executing activities which are novel in nature leading to a healthy competitive advantage. For further clarification, he classifies the origins of strategic positions into three classes namely variety based positioning, needs based positioning and access based positioning targeting the subsets of products, satisfying a niche and playing with the geographical factors respectively. But keeping in the mind the dynamic nature of the market, the player must not lose the variation capability and should not be complacent at all.

Further digging into the constituents of a successful strategy, porter explains the need of making tradeoffs, because you cannot be all things to all people, it will be mess of conflicting priorities. He emphasizes on the need of potent specialized areas through which CA should be derived. And as we all know that things organized together in a neat manner are always better than loosely attached strings, therefore a Fit should be maintained in all the functional areas of the company. Hence promoting coordination leading to effective operations and keeping everybody on the company on the same page regarding your overall strategy. He introduced three types of fits namely simple consistencies, supporting nature and optimized coordination, claiming the latter one to be the most perfect for sustaining CA.

Being active and beware of the external changes is also a part of his articles viewpoint, that the external factors do effect the success of the company but by no means it can over take the danger the company is opposed to from within the organization. So the inconsistencies has also been named by porter in the article that are competing priorities, functional boundaries and poor vision to name a few. Hence its a balancing act of managing the internal inconsistencies with the dynamic external jungle of vicious players who wants a piece of you.

Concluding the article porter forces huge amount of pressure on maintaining what you already have gained i.e. the competitive advantage and never let go of it. And build even deeper foundations on it hence creating your non-erodible advantage in the market and making you less vulnerable to the ever changing nature of the competitive jungle you compete in.