Operational Effectiveness is not strategy
In the world of business today, rivals can quickly copy market position, and competitive advantage is temporary. The problem is the failure to distinguish between operational effectiveness and strategy. Operational effectiveness and strategy are very important but they work in very different ways. A company can outperform rivals only if they can deliver greater value to customers or create comparable value at a lower cost, or do both. We can have cost advantage if we perform particular activities more efficiently than competitors and we have to look from all a company’s activities, not only a few.
Operational effectiveness (OE) means performing similar activities better than rivals perform them, while Strategic positioning means performing different activities from rivals’ or performing similar activities in different ways. When companies try to improve its operational effectiveness, such as TQM, it requires capital investment, different personnel, or simply new ways of managing. Improvement in operational effectiveness is not usually sufficient because competitors can quickly imitate management techniques, new technologies, input improvements, and superior ways of meeting customers’ needs. Strategy rests on unique activities
We have to be unique or different from competitive. For example, Southwest airline is able to compete to other nation airline because they have a different strategic. They offer short-haul, low-cost, point-to-point service between midsize cities. Strategic positions emerge from three distinct sources. -
Variety-based positioning: It is based on the choice of product or service varieties rather than customer segments. For example, Jiffy Lube. -
Needs-based positioning: It is based on a segment of customer. Serving most or all the needs of a particular group of customers. It arises when there are groups of customers with verities of needs. -
Access-based positioning: Segmenting customers who are...
Please join StudyMode to read the full document