Strategic Management
Managers face three main questions in regard to their business prospects: What is the company’s present situation? Where does the company need to go from here? How should it get there?
The answers to these basic questions can be achieved by a “strategy”. Porter, (1996) defined strategy as “the creation of a unique and valuable position, involving a different set of activities”. It is also defined as “a set of related actions that managers take to increase their company’s performance” (Hill & Jones, 2007). Another deep definition would be “A company’s strategy is managements game plan for growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations and achieving targeted objectives" (Thompson, Strickland & Gamble).
Putting all together in one piece, a strategy can be defined as the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations.
Operational Effectiveness vs. Strategic Positioning
For Michael Porter, operational effectiveness refers to that domain of organizational activity that is about having functions that work well. Operational effectiveness (OE) means performing similar activities better than rivals perform them. OE is not only about efficiency, it simply means the ability of a company to better utilize its inputs than rivals. An example would be reducing wastage and use of advanced technology to develop better products faster. In other words, OE is about continuously improving functional performance. The managers lead and control the functional activities, measure and improve the processes to achieve operational effectiveness (porters journal).
On the other hand strategic positioning means performing different activities from rivals or performing similar activities in
The answers to these basic questions can be achieved by a “strategy”. Porter, (1996) defined strategy as “the creation of a unique and valuable position, involving a different set of activities”. It is also defined as “a set of related actions that managers take to increase their company’s performance” (Hill & Jones, 2007). Another deep definition would be “A company’s strategy is managements game plan for growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations and achieving targeted objectives" (Thompson, Strickland & Gamble).
Putting all together in one piece, a strategy can be defined as the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations.
Operational Effectiveness vs. Strategic Positioning
For Michael Porter, operational effectiveness refers to that domain of organizational activity that is about having functions that work well. Operational effectiveness (OE) means performing similar activities better than rivals perform them. OE is not only about efficiency, it simply means the ability of a company to better utilize its inputs than rivals. An example would be reducing wastage and use of advanced technology to develop better products faster. In other words, OE is about continuously improving functional performance. The managers lead and control the functional activities, measure and improve the processes to achieve operational effectiveness (porters journal).
On the other hand strategic positioning means performing different activities from rivals or performing similar activities in