Analysis Of Michael Porter 's Article ' What Is Strategy?

There has been a large amount of research into what strategy is, since Michael Porter’s perennial work in the 1980s. Studies done on the execution of strategy have been far less numerous. However, there is one major understanding about the execution of strategy. The execution of strategy is a vital part of success in business. A summary of many myths surrounding various strategic executions will be outlined, along with their subsequent analyses.

Strategy is a set of complicated tactics formulated by the executives of a company directed towards the achievement of company’s goal (Salmela, 2002). It is about all the path ways that a company would follow to reach its ultimate goal. It is a company’s strategy which helps to identify what it does better than the other companies in the industries, which may be different from what it does best. For successful strategy formulation and implementation, a company should know the needs of customers and should have knowledge of its competitors. Through a good strategy a company would identify that opportunity which makes it different from the others (Thompson, 2005).

Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).

Strategy is the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within a challenging business environment to meet the needs of markets and to fulfil stakeholder expectation (Tutor2u.net, 2016). Strategy includes the movement arrangement of a particular organization for building focused advantage What 's more expanding its triple end result again those long haul. Likewise, the action plan identifies with accomplishing the monetary, social, furthermore biological execution destinations; basically, it serves span the hole between those long haul dream What 's more short-term choices. sometimes strategy is more about you actually do rather then what you intend to do which mean our real strategy emerge as we do it and may not line up with the plan (YouTube, 2016). In addition, high level of orchestration and vision is very essential in order to achieve overall goal. The Morden day executives need to develop a set of complex tactics that will lead to success and a good strategy should answer four key question which are where to compete, what value to be developed, what are the resources and capabilities to be used and how to sustain unique value (YouTube, 2016). Strategy may be generally regarding utilizing inside aids on make quality included

In this competitive world, many of the former industry’s strategic alternatives are no longer viable or likely to be successful. Today, there are few regulated monopolies, or companies with unique geographical access. Proprietary technologies are rapidly copied by competitors, and breakthrough innovation in either products or services is rare. Most of the competitive strategies organizations are employing today involve optimization of key business processes. Instead of serving all customers, they want to serve optimal customers— those with the highest level of profitability and lifetime value. Instead of receiving goods and services whenever they happen to arrive, they attempt to optimize supply chains to minimize disruptions and in-process inventory. Instead of looking backward at their business performance and making ex post facto adjustments, they seek to understand how optimum nonfinancial performance drives optimum financial performance, and to make accurate forecasts of future performance so they can react in advance of situations. Instead of throwing money at business problems, they seek to optimize their use of capital. But strategies involving optimization require something different than those based on taking business as it comes.

Operations strategy defines the way in which a firm competes in the marketplace. Examples of these strategies include (a) low cost, (b) quality, (c) speed of delivery, and (d) customization. Managers in the past had to decide which of these strategies was most applicable to the particular market segment they were serving. In so doing, they recognized that there were trade-offs involved. These traditional trade-offs are no longer valid for most businesses because technology has “raised the performance bar” by allowing firms to compete on several of these dimensions simultaneously. For example, firms using technology, such as Dell Computer, can now produce and quickly deliver individually customized products, and at a very competitive price. Technology

An organization is established, it has some mission and vision. This mission and vision define its operation and research. To fulfill the organization’s mission they have to develop top level plans and sustain long term competitive advantage that is Strategy. Following this definition, when an organization has mission, develop a plan and understand the “sustainable” competitive advantage - where competitor cannot easily duplicate the firm’s strategy.

Managers generally consider the rivalry among competitors as a major source for deriving strategy. As explained by the Michael Porter it is a narrow view of competition. A set of other parameters should be evaluated, mentioned in article as five competitive forces, along with industry structure, which affect the competition within an industry. These forces also impact the profitability of any industry. Different industries have different structure and different competitive forces which will affect the industry average of return on capital invested. Executives should do detailed analysis of different competitive forces and their strength at industry level and shape strategy to take advantages of these forces by positioning organization where forces are weak, exploit changes in the forces and reshape the forces in organizations favor. The five competitive forces that shape the strategy are threat of entry, power of suppliers, power of buyers, threat of substitute products or services, and rivalry among existing competitors.

Is our strategy pertinent to our opponents? What is the core of a good strategy? (Porter, 2015) So, on and so forth. Get together as a complete team, using communication. There are mutual mistakes made by executives daily, by perplexing the strategy with the goal. Is the company’s strategy comprehensive? Always remember that, activities are dissimilar from the strategy. The strategy is more than a mission statement, or a vision statement. A good strategy is very precise. Focus on the ability to make good selections and the company will contend, and differentiate itself from the opposition. This is vital to the accomplishment of the company. The core levels of our strategy are how we compete in the industry. A.K.A. Business Strategy. You need a strategy for each separate business within the company. Bring these businesses together successfully, we then create value? That’s corporate strategy.

(To make a summary of the article while answering the question, the answer directly related to the questions are highlighted )

The objective of drafting this Assignment is to make aware and argued about “what is strategy” and different viewpoints of strategy which is based on the Case study “What is strategy?” by M.E. Porter from the Harvard Business Review, November, December 1996.

An organization can best achieve significant competitive advantage by focusing on operational excellence, which can be described as smart, agile and aligned.

There is no exact definition for Strategy because it is defined in different ways as some people think that make a plan to get success in future is a strategy while others think that future is hard to predict. Exceptionally, some Japanese companies have no strategies though these companies have a good cost and continuous improvement. The definition for strategy is to explain the direction and scope of any company for the long term to achieve advantage for the company or to fulfill the needs and expectations. Strategy is different from Operational effectiveness and they work in different manner in the companies. Michael Porter, who is a professor at Harvard Business School and a strategy expert, says that it should determine how organizational resources and skills should create advantage. Accordingly, Strategy can also be defined as an organizational change during actions in the organizations for better and advantageous results or to determine how we win and get success in the future period. It is a needful developed plan with respect to market to compete the world. Organizations should be responsible for competitive changes according to the market. It is the main goal for any Organizations. Business/IT strategy is very important to know the success rate of your business. Apart from Business Strategy, the other two main types of strategy are Corporate Strategy and Team Strategy. These strategies give competitive advantage of cost leadership, differentiation and focus. The

“Competitive strategy involves positioning a business to maximize the value of the capabilities that distinguish it from its competitor’s” (Porter 1980:47). A successful business plan requires first and foremost the formation of an appropriate strategy. Through the implementation of a suitable strategy, the company is able to obtain its own industry niche and gain an understanding of its customers (Porter 1985). Whichever strategy is adopted it must be adequately integrated within the firms goals and missions to achieve a competitive advantage (Parker and Helms 1992).

An organisation bases its strategy according to its environment, and if implemented right will be successful. Firms can target their products by a broad target, thereby covering most of the marketplace, or they can focus on a narrow target in the market (Lynch, 2003). Michael Porter created a generic strategies framework in order for an organisation to gain a competitive advantage in their industry. Porter considers three generic strategies in his framework that an organisation can undertake to gain this advantage. He believes that an organisation falls into either cost leadership (lower cost) or differentiation and once applied in a broad or narrow scope, as discussed by Lynch, creates focus (Figure 1). Furthermore, some organisations undertake in more that one of these strategies and if unsuccessful is called the stuck-in-the-middle strategy. However, if the organisation combines elements of differentiation and elements of low-cost successfully, this becomes and hybrid option and is becoming increasingly popular amongst firms in the modern day.