What is Strategy?

1
What is Strategy?

• Discussion Questions

2
Operational Effectiveness

• What does Porter mean when he says that
  operational effectiveness is necessary but not
  sufficient?

3
Differences You Can Preserve

• Explain what Porter means when he says, A
  company can outperform rivals only if it can
  establish a difference that it can preserve.

4
Operational Effectiveness and Activities

• According to Porter, operational effectiveness
  means performing similar activities better than
  rivals. Is it possible to achieve a competitive
  advantage in this way? If so, how long will such
  an advantage likely last?

5
Productivity Frontier

• What does Porter mean by a productivity frontier?
  Is it desirable for a company to seek to be at,
  or near, this frontier?

6
Productivity Frontier Over Time

• What does operational effectiveness competition
  do to the productivity frontier over time?

7
Competing through Operational Effectiveness

• Why then is it very hard to compete successfully
  solely on the basis of operational effectiveness
  over a long period of time?

8
Operational Effectiveness vs. Strategic
Positioning

• Contrast operational effectiveness with strategic
  positioning. In strategic positioning how would
  a company attempt to perform important similar
  activities relative to its rivals?

9
Competitive Advantage and Activities

• Would a company seeking to establish competitive
  advantage focus exclusively on similar activities
  to those of its rivals? Explain.

10
Strategy and Continuous Improvement

• According to Porter, continuous improvement
  (while desirable) can draw companies toward
  imitation and homogeneity. Does this contribute
  to strategies that differentiate a company from
  its rivals?

11
Strategy and Being Different

• Porter claims that competitive strategy is about
  being different. What does he mean by this?

12
Strategy and Being Different Southwest Airlines

• What are some of the important ways Southwest
  Airlines utilized this idea?

13
Strategy and Being Different IKEA Furniture

• What are some of the important ways the IKEA
  furniture company utilized this idea?

14
Variety-Based Positioning

• Variety-based positioning is based on offering
  only a subset of an industrys products or
  services? How did Jiffy Lubes business model
  demonstrate this?

15
Variety-Based Positioning

• Do you think the I/S Division utilizes this?
  Explain?
• Variety-based positioning is based on offering
  only a subset of an industrys products or
  services?

16
Strategy Positions CarMax

• Porter points out that some strategy positions
  are already available to existing companies, but
  are exploited first by new entrants. He gives
  CarMax as an example. What activities relative
  to selling used cars did CarMax do differently
  than established car dealers?

17
Sustainable Advantage

• Porter states Choosing a unique strategic
  position, however, is not enough to guarantee a
  sustainable advantage. What is the main threat
  to achieving sustainable advantage?

18
Sustainable Positions and Tradeoffs

• Porter asserts that strategic positions are not
  sustainable unless there are tradeoffs with other
  positions. What does this mean?

19
The Straddler Approach

• The straddler seeks the success of a competitor
  and tries to imitate it while maintaining its
  existing position. Does this usually work?
• How did this work for Continental Airlines with
  their Continental Lite service in its competition
  with Southwest?

20
Tradeoffs Southwest Airlines

• Porter claims that tradeoffs arise from the
  tailored activities that are chosen to enable a
  strategic position. Give examples of this from
  the Southwest Airlines example.

21
Tradeoffs The I/S Division

• Can you identify some tradeoffs the I/S Division
  makes by adopting the approach to leverage a
  fully integrated architecture?

22
Strategy and Combining Activities Southwest
Airlines

• Porter makes the following statement While
  operational effectiveness is about achieving
  excellence in individual activities, or
  functions, strategy is about combining
  activities.
• Relate this to the Southwest Airlines strategy
  of rapid gate turnaround. In other words how
  does this relate to how Southwest performs other
  activities?

23
Strategy, Activities, and Fit

• Porter discusses the need for fit among a
  companys chosen activities. How do the various
  activity choices made by Southwest Airlines fit
  within their overall strategy?

24
Imitating Activities

• How easy is for a competitor to imitate a single
  activity you might choose to do? What might this
  depend on? Explain.

25
Interconnected System of Activities

• How does creating an interconnected system of
  activities relate to creating sustainable
  advantage?

26
Strategy and Internal Pitfalls

• Porter asserts that the greatest threat to
  strategy often comes from within a company rather
  than from without. What does he mean by this?
  What is a common internal pitfall for creating
  successful strategy?

27
The Growth Trap Maytag

• What does Porter mean by the Growth Trap? How
  did this play out at Maytag?

28
Growth Trap and Profitability

• How does understanding the growth trap help a
  company achieve more profitability?

29
Operational Effectiveness Revisited

• Does Porter advocate ignoring an emphasis on
  operational effectiveness? Explain?

30
Leadership and Strategy

• Why is leadership so important for establishing a
  clear strategy?

31
Strategy and Organizational Choices

• How does strategy relate to organizational
  choices?

32
Leadership Alone?

• Can leaders alone implement a successful
  strategy?