Porter on Strategy

Topics: Value chain, Strategic management, Michael Porter Pages: 20 (2786 words) Published: June 22, 2013
What is Strategy?

Professor Michael E. Porter Harvard Business School World Business Forum June 6, 2006 This presentation draws on ideas from Professor Porter’s books and articles, in particular, Competitive Strategy (The Free Press, 1980); Competitive Advantage (The Free Press, 1985); “What is Strategy?” (Harvard Business Review, Nov/Dec 1996); “Strategy and the Internet” (Harvard Business Review, March 2001); and a forthcoming book. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Michael E. Porter. Additional information may be found at the website of the Institute for Strategy and Competitiveness, www.isc.hbs.edu. Copyright 2006 © Professor Michael E. Porter

How Managers Think About Competition

COMPETING TO BE THE BEST

COMPETING TO BE UNIQUE

• The worst error in strategy is to compete with rivals on the same dimensions

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Copyright 2005 © Professor Michael E. Porter

• Agility • Mergers / Consolidation • A unique value proposition versus competitors • Outsourcing • Execution • Clear tradeoffs, and choosing what not to do • Alliances / Partnering • Continuity of strategy with continual improvement in realizing the strategy • Aspirations

• • • • • • • • • •

A different, tailored value chain Best practice improvement Learning Innovation Activities that fit together and reinforce each other Downsizing The Internet (or any technology) Restructuring Flexibility A vision

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Copyright 2005 © Professor Michael E. Porter

Strategy
What Is a Strategy?
• A unique value proposition versus competitors • A different, tailored value chain • Clear tradeoffs, and choosing what not to do • Activities that fit together and reinforce each other • Continuity of strategy with continual improvement in realizing the strategy • • • • • • • • • • • • • • 4

What is Not a Strategy?
Best practice improvement Execution Aspirations A vision Learning Agility Flexibility Innovation The Internet (or any technology) Downsizing Restructuring Mergers / Consolidation Alliances / Partnering Outsourcing

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Flawed Concepts of Strategy
• Strategy as aspiration
– “Our strategy is to be #1 or #2…” – “Our strategy is to grow…” – “Our strategy is to be the world leader…”

• Strategy as action
– – – – “Our strategy is to merge…” “… internationalize…” “… consolidate the industry…” “… outsource…”

• Strategy as vision
– “Our strategy is to meet our customers’ needs…” – “…to advance technology for mankind…”

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Vision Statements
Autodesk Transforming business by design Avon To be the company that best understands and satisfies the product, service and self-fulfillment needs of women – globally. Goodyear Tire and Rubber Become a market-focused tire company providing superior products and services to end-users and to our channel partners, leading to superior returns for our shareholders. Lafarge To be the undisputed world leader in building materials

Marriott International, Inc. To be the number one lodging company in the world.

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Copyright 2005 © Professor Michael E. Porter

Mission Statements
Leo Burnett To be the best in the world bar none at building the most valued, leadership brands.

Home Depot The Home Depot is in the home improvement business and our goal is to provide the highest level of service, the broadest selection of products and the most competitive prices.

Unilever Unilever's mission is to add Vitality to life.

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