What is

trategy?

Analyzing the
nuances
of a Strategic Agenda

Group 2

Operational Effectiveness vs. Strategy

Necessary part of management but not
strategy
To outperform rivals, companies must create a
difference they can preserve
Deliver greater value or create comparable
value at lower cost
Greater value allows for higher average unit
prices, while greater efficiency results in
lower average unit costs
OE means performing similar activities better
while Strategic Positioning means performing
different activities or the same activities
differently

Operational Effectiveness vs. Strategy

Strategy rests on Uniqueness

Competitive Strategy is about being different

Strategic Positioning is often described in
terms of customers, when in reality, its
essence lies in the activities

Origins of Strategic Positions:

Variety Based Positioning
Needs Based Positioning
Access Based Positioning

Sustainable Position Requires Trade-Offs

Uniqueness is not enough to guarantee a

sustainable advantage, due to the ease of
imitation.
Sustainable strategic positioning requires trade
offs

Trade Offs:
Inconsistencies in image or reputation
Differing activities yielding inflexibilities
Limits on internal coordination and control

The essence of strategy is choosing what not to do

Fit
Drives
both
Sustainability

Competitive

Advantage

Fit locks out imitators by creating a chain that

is
as strong as its strongest link

Types of Fit:
First Order Fit
Simple Consistency
Second Order Fit Reinforcing Activities
Third Order Fit
Optimization of Effort

Fit among activities:

Drastically increases differentiation
Creates pressures to improve operational
effectiveness

and

Rediscovering Strategy

The Failure to Choose

Adoption of herd mentality results in neglecting
the importance of strategy

The Growth Trap

Compromises made in the pursuit of growth
erodes competitiveness

Seeking Profitable Growth

Maintaining distinctiveness ultimately assists in
profitable growth

Role of Leadership
Consistent intellectual framework to guide
strategy is paramount

Summary
Operational Effectiveness is not strategy
Leadership must continually make clear trade
offs
Competitive advantage grows out of an entire
system of activities and thus fit is paramount
Strategic agendas demands discipline and
continuity
Competition is dynamic and thus companies
must actively try to push out the productivity
frontier

THANK YOU

BORA | GROVER | MATHEWS | MONDAL | NEMA | PAL |