Operational Effectiveness Is Not Strategy

Creating strategic competitive advantage in the process, functional strategy, business strategy, operational strategy or corporate strategies

Most businesses strive to attain competitive advantage, whether they explicitly realize this or not. The concept of competitive advantage was propagated by Michael Porter, in his landmark book Competitive Strategy. He defined competitive advantage as “Competitive advantage grows out of value a firm is able to create for its buyers that exceeds the firm 's cost of creating it.” (Porter, 1985) The concept provided a new paradigm for looking at the role of competition in firm’s success or failure in the long term. The succinct definition encapsulates number of related concepts that help firms identify and analyze their competitive advantage. In normal parlance, competitive advantage is described as the advantage a firm has that helps it get ahead of competitors or gain higher market share. Whether the management explicitly realizes this fact or not, they usually are focused on identifying and developing traits that help their firm get ahead of competition and have sustained growth in the long term. Many organizations that do not have strategic separate strategic thought process, try to attain the same advantage through micro decisions like product portfolio, cost cutting, pricing decisions, location selection, etc. However, their final objective is competitive advantage. Barney (1991) explained number of internal resource that help the firm in attaining competitive advantage in the long term. In this analysis, the author defines key terms related to competitive advantage, and

There are many strategies that organizations can incorporate in today’s business environment. An organization can decide to take on a low-cost provider strategy, a focused low-cost strategy, broad differentiation strategy, focused differentiation strategy, and/or a best-cost provider strategy. While all of them have their own unique features and can offer a competitive advantage over its rivals, Competitive Shoes, Inc. decided to incorporate the best-cost strategy into its organization in order to compete against it rivals. By incorporating the best-cost strategy into its organization, Competitive Shoes Inc. felt that they could stay

Each organization has or should have a distinct business strategy to ensure they reach their desired goals and objectives. Uniquely, the business strategy, or competitive strategy, should include their target consumers, the product or service desired by their consumers, and their roadmap to remain competitive in the market (Parnell, 2014). However, strategies may be difficult to determine when the organization is engrossed in one industry, but decides to dip their toe in another industry (Bethel, 2016).

Customers prefer cost-effective products and services. They prefer convenient purchase and high quality service. The organizations which aim at this target group of customers orient the value on “operational excellence”. For example, Wal-Mart, Fed-Ex.

The competitive strategy of two companies are incomparable in many different levels. In most cases, one organization can provide a service at a lower cost whereas another organization can provide the same services at a higher cost. Business processes such strategy development, product development, systems to produce goods and services, and order fulfillment are imperative in a competitive market place. Thus, with the right business processes; organizations such as Midas can strive towards improved operating efficiencies.

Strategy is not only a tool for outfoxes the competition but also an incredible means for creating and shaping a company

“Strategy as Revolution” is also associated with a set of weaknesses that compromise the quality of the article. For instance, the author recommends top executives to gather the viewpoints of lower rank employees in terms of strategy formulation; however, Hamel (1996) fails to highlight the ways these viewpoints can be filtered taking into account the fact that there could be dozens if not hundred ideas and implementing all of them is not practical.

In order to succeed in today's market place, whatever key business purpose or strategy your company emphasizes, must be reflected in the workplace practices. These workplace practices should subsequently manage and change the behaviors of the company and its employees to serve that purpose and strategy. Strategic Alignment is the business redesign process by which you link strategy to the business model and environment with the objective of minimizing waste and misdirection of effort and resources. So how can you determine if your work place practices align with your strategy? How can you achieve strategic alignment?

In other words, which strategies deliver the best performance hinges on the strength and interplay of the strategies employed by rival companies—not on some mystery "silver bullet" decision combination that players are challenged to discover.

Applying our knowledge about Economics of Strategy, we know that there are different ways to create additional value:

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.

The planning school of thought is a strategy that emphasizes the need for an organization to ensure that its business strategy is in alignment with the environment that it operates. In other words, an organization’s strategy must ‘fit’ the environment that it chooses for a business operation. A meticulous analysis of both the internal and external environments is considered in the planning school of strategy. Furthermore, the planning school of strategy often requires details that could probably make an organization not flexible to a market even when conditions demands flexibility (Barnat, 2014). Additionally, this strategy employs organizations to implement various marketing theories and Product Life Cycle in understanding the maturation of the market so that with past trends coupled with

Strategic decisions are often based on by the company can use its existing competitive advantages in the process of promoting the value and capital growth (Lynch, 2009). However, sustained competitive advantage on how to perform these operations largely depends on the company. (Porter, 2008) The need for business development and expansion has been known to promote the product and marketing innovation, which in turn prompted them to take the basis of the different organisational strategic, it’s based on products and target markets (Ansoff, 1984).

“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).