Review the article What is strategy? by Michael .E. Porter Essay

Michael Eugene Porter is a professor at The Institute for dodge and Competitiveness, based at the Harvard Business School. He is gener all in ally recognized as the father of the modern strategy field. angiotensin-converting enzyme of his great writing is What is strategy? published in 1996.The beginning of the hold raises a mistake of Operational Effectiveness for Strategy that umpteen companies had suffered for close to two decades. In the article, Operational Effectiveness means performing alike(p) activities better than rivals perform them. To achieve this objective, companies based on its strength development their best available technologies, skill, management, human resource, eliminated wasted effort, motivated employees As the number of this, they could offer lower apostrophize besides superior quality to the customers meanwhile moving toward the frontier. In this case, customers and suppliers received a stilt of bene last. But for the companies the stiff and d ramatic profit they received at the early time daylight by day became nonhing. They just run faster and faster in the endless race of Operational Effectiveness, no unrivalled could win. One of the reasons for this is so irony. Competitors imitated the best practices in technology, management, input improvement. Therefore close to of the companies look roughly the same. There were no divergency and competitive advantage anymore and the sinking price ever ne arr to marginal cost. We send word see it clear in mobile phone market Samsung is facing with the imitation from Chinese companies for example Xiaomi. Those tonic entrants put a heavy threat on market sh ar and made Samsung lose a lot of money.By finding out and describe the matter really clearly, this article has shown the difference in operating the companies. Managers comport tried to get the better unless receive the worse. It explains why many companies got stuck in their management trap for most twenty years. T o view as it cleargonr, a very typical example locomote into Japanese companies which imitated and emulated one just closely other, tried to satisfy any need fromcustomers. This stock from Porter helps managers avoid mistake and remind them closely strategy.In the warrant part of the article, the method to solve the matter is introduced Strategy rests on odd Activities. Porter suggested that to avoid copying, and to be antithetic, managers have to choose a distinguishable set of activities to deliver a unique mix of value, and perform activities several(predicate) from competitors. It is Strategy positioning including three sources The first one is Variety ground Positioning. The companies use this if they abide take in a particular harvest or dish up using distinctive set of activities to satisfy one ordinary need of a group of customers. A very unafraid example for this case is Jiffy Lube International. It just focus on automotive lubricants, no other car repair or maintenance service. Therefore, their service is faster at lower cost, persuading customer to get anoint changes. This bureau will disembowel customers with strong and specific need specially the wise customers who believe in the advantage of specialization.The second one is involve found Positioning meaning serving all or most of the needs of a particular group of customers. To illustrate this case, Porter showed a very excellent example of Ikera. This telephoner tried to serve all the home furnishing needs of its target customers who were happy to trade-off service for cost and need stylish furniture, in-store child care, extended hours. Besides according to the customers sprightliness period or special occasions, companies can offer different kinds of services, for example, BIDV curse can offer student a loan for study, after that another loan for buying car, house or when he needs some money for his wedding or business. The third one is Access Based Positioning Segm enting customers who are accessible in different federal agencys (geography, scale, or other differentiator that requires customizing of activities to r from each one this group of customers). For example, in Indian countryfied places where the roads were too poor that car and truck can not approach, Unilever group used topical anesthetic people to carry their productions (shampoo) and deliver tothe local people in those remote places. In practice, some companies likes Blackberries, Samsung can attract normal customers by advertising notwithstanding for famous people who create the fashion trend and influence communitys preference, the best way is sponsor or giving them the new expensive product as a present and paying them to use it. Anyway, there is an argument that is strategy doesnt mean niche approach and the most important is that closeon selecting a set of activities has to touch a group of customers common needs. The more valuable the friendships position is the more kind for rivals to imitate. Competitors can reposition itself or straddling (Continental airline maintain its full service while imitated Southwest point-to-point routes, no meal, low fare). In regularise to make strategic position sustainable and avoid a core of functions, companies have to trade-off. And it is mentioned in the third part of the article. Trade-off creates the need for woof and protects against repositioning and straddles as well as limit what a company offers. The company trades-off for three reasons the first is in consistencies in image or reputation. For example Neutrogena has built it image for medical reputation, other brand can not copy because of huge expense. Some famous singers, actors or actresses never appear in small-time, unimportant show or event which whitethorn blur their image and reputation. The second is from activities themselves, different position need different standards, method, and equipment (Ikea). A university lab mode is just used for teaching or checking models in simple cases. It can not be used to do business in complex case like the lab room in industry. Finally it comes from limit on internal coordination and control. Continental befuddled a lot of money when imitating Southwest to add a new service for point-to-point flight.However, in practice, trade-off is not easy. Its not surely to choose what to remain and what to give up. In psychology, managers always want to make their company grow. When seeing the competitors who are victorful and get a lot of profit, its hard to ignore without jump into that business. Therefore, trade-off requires thoughtful determination and sensitive impression. Furthermore, Porter argues that to gain competitive and sustainability each thing has to be Fit. That is the way activities relate to another. They are combined to fit and pay back another. Activities can be performed separately but the give effect on each other. Since competitors are facing an entire ecosyste m, with elements that allow and strengthen each other existence, they need to be very persistent, capitalize, or creative to be able to replicate or check over the companys strategy. To break a single chopstick is easy but its impossible to do the same with a bundle. Samsungs success is achieved by a crew many aspects. Their productsare well knowing by excellent designers who are often visit worlds wonders, museum, and learn more companionship from specialists. In addition, they have 33 technology centers for research. Their new management philosophical system is another strong point, quality control and positive changes are extremely focused. On the other hand, Long Thanh milk fell to get fit. Their product Lothamilk is really good on quality and preferred by customers but the conflict among the lureers, the problem in management, and weakness in promotion hinder them from being in the top and growth. In the last part, Porter mentions about Rediscovering Strategy. One of ma in point is Failure to choose. Managers have been confused about the necessity of making choices. Scaring of leaving behind, companies imitated one another rush to meet all the needs of customers. Focusing on the efficiency frontier could lead one to think that companies should be able to beat its rivals simultaneously on all dimensions.Another one is Growth Trap that means dodge pursuit of growth has a diluting effect on a companys strategy. Neutrogena suffered such a painful experience when they expanded into a wide variety of products eyes-makeup remover, shampoowhich are not unique and cave in their image. Everything became worse when they began turning to promotion. The second point is Profitable Grow in addition often efforts to develop might harm the strategy but managers can choose suitable activities and cost to element their performance, deepen the long-term position. For example, Maytag make it value brands into separate units with different strategic position while c reating umbrella appliance company for all its brands to gain critical mass. The last but not least important is The Role of Leadership. The managers making choice or decision is really important. They have to choose what to do and what to trade-off. In Samsungs management, when the CEOs decision is made, all the members in this company have to strictly follow without any other argument or objection. In conclusion, improving in Operational Effectiveness is essential but its not enough because company need strategy for long-term success. Therefore, both company has to create preservable positive difference to set up it position, know how to trade-off, keep fit, and flexible enough to adapt wit h major constructional changes in its industry.The article What is strategy helps the readers to find out the difference between operational Effectiveness and Strategy, Then managers can realize the way to develop a valuable and sustainable strategy to control the companys growth and maintain its composition as well as avoid mistake, and copy from the rivals. After reading this managers can combine positioning, trade-off, fit together to have a good strategy. Italso shows us Strategy is the direction and capacity of an organization over long-term, and it is very important for the success of any business organization. Besides all the arguments in the article are in a good order. At the beginning, the problem was raised, and then came many explanations leading the solution. Each argument is made clear by a typical example which is clearly analyzed. On the other hand, the subjects in examples are reused many times, that helps the readers feel familiar and understand deeply about every case. Moreover, the information in the article is really useful and concrete for management because it is the result of a careful research based on real, practical situations of some famous companies from all over the world. In addition, the business veracity reflected in this article clearl y illustrates the theory in the book. Finally, it is well designed and easy to understand. Therefore, all readers from beginning or advantage levels can make love it and find something useful for them. The end