PORTER

TYPES OF STRATEGIC POSITIONING:

1. VARIETY BASED:
a. A variety-based positioning can serve a wide array of customers, but for most it will
meet only a subset of their needs.
b. Variety-based positioning makes economic sense when a company can best produce
particular products or services using distinctive sets of activities.
2. NEED-BASED:
a.
b. Targeting a segment of customers. It arises when there are groups of customers
with differing needs, and when a tailored set of activities can serve those needs
best.
c. Differences in needs will not translate into meaningful positions unless the best set
of activities to satisfy them also differs.
3. ACCESS-BASED:
a. Access can be a function of customer geography or customer scale—or of anything
that requires a different set of activities to reach customers in the best way.

“Whatever the basis—variety, needs, access, or some combination of the three—positioning

requires a tailored set of activities because it is always a function of differences on the supply
side; that is, of differences in activities.”

STRATEGY IS ABOUT CREATING A COMPETITIVE SUSTAINABLE ADVANTAGE

HOW TO AVOID BLURRING OF STRATEGIC POSITION

- Clarity in competitive advantage
- Deepen the strategic position rather than broadening it
- Avoid partial imitation – this could lead to blurring

TRADE-OFFS:

 Trade-offs occur when activities are incompatible.

 Simply put, a trade-off means that more of one thing necessitates less of another.
 Trade-offs create the need for choice and protection against re-positioners and straddlers.

REASONS FOR TRADE-OFFS:

1. INCONSISTENCIES IN IMAGE OR REPUTATION

a. A company known for delivering one kind of value may lack credibility and confuse
customers—or even undermine its reputation—if it delivers another kind of value or
attempts to deliver two inconsistent things at the same time.
 2. ACTIVITIES THEMSELVES
a. Different positions (with their tailored activities) require different product
configurations, different equipment, different employee behavior, different skills, and
different management systems.
b. Many trade-offs reflect inflexibilities in machinery, people, or systems.
3. LIMITS ON INTERNAL COORDINATION & CONTROL
a. Companies that try to be all things to all customers, in contrast, risk confusion in the
trenches as employees attempt to make day-to-day operating decisions without a
clear framework.

FIT – DRIVER OF COMP. ADV & SUSTAINABILITY

 Fit locks out imitators by creating a chain that is as strong as its strongest link
 Fit is important because discrete activities often affect one another

TYPES OF FIT:

1. QST DEGREE - SIMPLE CONSISTENCY:

a. First-order fit is simple consistency between each activity (function) and the overall
strategy
b. Consistency ensures that the competitive advantages of activities cumulate and do not
erode or cancel themselves out
c. It makes the strategy easier to communicate to customers, employees, and
shareholders, and improves implementation through single-mindedness in the
corporation.
2. 2nd DEGREE OCCURS WHEN ACTIVITIES ARE REINFORCING:
3. 3RD ORDER OCCURS WITH OPTIMIZATION OF EFFORT
a. Coordination and information exchange across activities to eliminate redundancy and
minimize wasted effort are the most basic types of effort optimization.

FAILURE IN STRATEGY:

1. Failure to chose
a. the threats to strategy are seen to emanate from outside a company because
of changes in technology or the behavior of competitors. Although external
changes can be the problem, the greater threat to strategy often comes from
within
2. Growth trap
a. Trying to grow fast you lose track of operations
QUESTION PAPER ANSWERS:
NASH EQUILIBRIUM:
 The resting point due to the repetitiveness of actions
 In a bit to want more you end up getting less
 Not necessarily will provide the most favorable outcome
 There can be more than 1 Nash equilibrium
 Collectively players are rational but individually they are getting less pay-off

DOMINANT STRATEGY:
 The strategy that provides the most pay-off regardless of what the competitor does

HOW CAN COMPANIES COOPERATIVE & COLLECTIVE PROFIT MAXIMIZATION:

“HYPER-COMPETITION IS A SELF INFLICTING WOUND”

 Signaling
 Commitment
 Revealing the strategy

BLUE OCEAN STRATEGY:

 Compete in an unrestricted market

 Make the competition is irrelevant
 Create & capture new demand
 Simultaneous Pursuit

HOW TO DEAL WITH COMPETITION (MUDIT):

 Product Differentiation
 First Mover Advantage
 Blue ocean strategy –
 Consolidating the market (buying out the competition)
 Converting strategy from Simultaneous game to Sequential game
 Poison Pill – Kill a portion of your company to avoid takeovers or a larger negative impact