Porter Definition of Strategy
WHAT IS STRATEGY? BY MICHAEL PORTER!
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What is Porter’s definition of Strategy?
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Porter claims that a competitive strategy refers to the fact of being different to the competition, choosing a different set activities to deliver a unique mix of value to the client. He affirms that the essence of strategy is in choosing to perform actions in a different way than the rivals do and differentiate themselves in the market aligning themselves at the same time with the needs and wants of their consumers and clients.
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An example of this strategic positioning referred by Michael Porter is the global furniture retailer based in Sweden, Ikea, that targets young furniture buyers that want stylish furniture at a low cost. Ikea uses a self-service model based on clear, in-store displays that show customers every product they sell in room-like settings so they can have an idea of how to decorate and imagine the different ways they can use the products Ikea offers. Ikea also designs its very own low-cost, ready-to-assemble furniture without relying on third party manufacturers and has a system of “do it yourself”, where customers are expected to do their own pickup and delivery in the warehouse section that houses all the products in boxes on pallets and Ikea will even sell the clients a roof car for their car to use for the transport of their purchase and that they can return for a refund later.
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Another good example of this strategic positioning by differentiation is Apple, multinational corporation that designs and produces electronic equipment, hardwares and softwares, and that implements a system where the consumers can try all theirs products and compare them with the ones of the competition, giving them personalized assistance as a way to make that the clients fall in love with their offerings and make them want to pay more than if they went with the competitors. In this sense, it can be said that strategic positions can be
1!
!
!
What is Porter’s definition of Strategy?
!
Porter claims that a competitive strategy refers to the fact of being different to the competition, choosing a different set activities to deliver a unique mix of value to the client. He affirms that the essence of strategy is in choosing to perform actions in a different way than the rivals do and differentiate themselves in the market aligning themselves at the same time with the needs and wants of their consumers and clients.
!
An example of this strategic positioning referred by Michael Porter is the global furniture retailer based in Sweden, Ikea, that targets young furniture buyers that want stylish furniture at a low cost. Ikea uses a self-service model based on clear, in-store displays that show customers every product they sell in room-like settings so they can have an idea of how to decorate and imagine the different ways they can use the products Ikea offers. Ikea also designs its very own low-cost, ready-to-assemble furniture without relying on third party manufacturers and has a system of “do it yourself”, where customers are expected to do their own pickup and delivery in the warehouse section that houses all the products in boxes on pallets and Ikea will even sell the clients a roof car for their car to use for the transport of their purchase and that they can return for a refund later.
!
Another good example of this strategic positioning by differentiation is Apple, multinational corporation that designs and produces electronic equipment, hardwares and softwares, and that implements a system where the consumers can try all theirs products and compare them with the ones of the competition, giving them personalized assistance as a way to make that the clients fall in love with their offerings and make them want to pay more than if they went with the competitors. In this sense, it can be said that strategic positions can be
References: Coulter, M. (2013). Strategic management in action. Upper Saddle River, NJ: Pearson Education, Inc. Porter, M. (1996). What is strategy? Harvard Business Review.