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

1486 WordsJul 15, 20156 Pages
Michael Porter’s article, “What is strategy?” sets to explain that both operation efficiency (OE) and strategy are required for reaching superior performance, but further clarifies and emphasizes the misnomer that OE is not strategy. OE is important to a business and serves to incorporate best practices, benchmark competition, build efficiency and improve productivity. By performing similar activities better than rivals will promote constant changes. In order to achieve OE there needs to be flexibility. The productivity frontier (best in class) expands as everyone in the same business improves its OE. The frontier is as a dynamic ever-changing moving target that continues to move outward. As firms continue to move towards the same path of OE there is rapid imitation towards “Best practices” that drive competitive convergence. Raising the bar will result in no competitive advantage and all firms run the risk of becoming homogenous. This path will lead to mutually destructive competition that are far away from core strategies that no one can win at the end. OE is not sufficient to explain and define strategy. Company and managers confuse OE for competition and run into trouble by only trying to focus and maximize OE. Firm’s loose their competitive advantage by focusing on growth and forget to focus on core competencies that gave them their competitive advantage in the first place. Companies should focus on strategy and the important contents of strategy. This starts at core

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