Reflection Paper: What is Strategy?
Porter invalidates “Operational Effectiveness” as being strategy. As he puts it, oftentimes, businesses concentrate on productivity, quality and speed. These concepts lead further down to total quality management (TQM), benchmarking, time-based competition, outsourcing, partnering, reengineering and change management. Although these principles may sound ideal, these do not lead to the ultimate goal of the company and that is profitability.
Strategy rests on the essence of performing activities differently than rivals do. Also, strategy defines a company’s position, makes trade-offs, and forges fit into activities.
Strategic positioning means performing sustainably different activities from rivals’ performing similar activities in different ways. Sustainability of such entails trade-offs with other positions and should have a period of a decade and not of a single planning. This concept could be based on customers’ needs, customers’ accessibility, or the variety of a company’s products and services.
Personally, I do believe on the argument that he is trying to prove through the paper. As an accountancy major which studied different management concepts as part of my minor subjects and my major subjects as well, this paper has lead me to a conclusion that I was not able to see before. All the topics that I have learned from my previous courses rest primarily on operational effectiveness (TQM, benchmarking, etc.), knowing that these all are synonymous to the strategy of the business. And yes, this paper proved my belief to be wrong. Having read the whole article, it made me realize one thing, strategy is very different from operational effectiveness, but they go along with each other. Through hand-in-hand cooperation, these two principles lead to the ultimate success of the business. Without the other, it does not lead the company to do so. Therefore, it is confirmed that I really do believe in what Michael Porter...
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