Essay Example on Many companies want to improve their productivity due to dynamic Market









Completion of Reading This article contained 19 pages on Why is Strategy All the pages were read the article Introduction According to the author many companies want to improve their productivity due to dynamic markets and the advancement of technologies Managers must use tools to improve their productivity to compete Companies need to be flexible to respond speedily to the constant changes that occur in the market Synopsis and Evaluation Operational effectiveness is not strategy There are two concepts that the author wants to clarify in his paper First he defines operational effectiveness as the ability to perform similar activities better than the competence In addition to this he argues that efficiency belongs to this field and this efficiency develops better products faster On the other hand he ventures in explaining strategy positioning as the art to perform different activities in different ways Both are necessary for the superior performance of an organization It is worth of nothing that a company improves its operational effectiveness can change the frontier in an organization One of this trend is exemplified in the Japanese companies 

They were able to offer lower cost and at the same time they provided superior quality If a company wants to generate a profitable product the key is to improve continually in operational effectiveness Strategy rests on unique activities The genius of competitive strategy lies in being different by choosing a different set of activities that brings as a result unique mix of value This principle is exemplified in an airline company that offers low cost and low fares to customers that can travel more frequently and easily According to the author the essence of strategy is choosing to perform activities in a different manner than rivals Also the writer presents three different sources of strategic positions First variety based positioning that is based on the choice of product and service varieties rather than customers segment Second needs based positioning is based on targeting a segment of customers Third access based positioning is segmenting customers who are accessible in different ways A sustainable strategic position requires trade offs According to Porter a sustainable advantage cannot be guaranteed merely by choosing a unique position A competitor may choose to reposition himself to match the superior performer and a competitor may try to match the benefits of a successful position while maintaining its current position The author mention that trade off means that more than one thing needs less than another and trade off arise from activities themselves 

A strategy can be defined as a making trade off in competing By choosing what no to do is the essence of strategy Fit drives both competitive advantage and sustainability The author mentions that positioning choices determine not only which activities a company will perform and how it will configure individual activities but also how activities relate to one another While operational effectiveness focuses on individual activities strategy concentrates on combining activities p 12 Fit locks out imitators by creating a chain that is as strong as its strongest link p 13 According to Porter the fit is the central component of competitive advantage because discrete activities often affect each other He distinguishes three types of fit simple consistency fit activities reinforcing fit and optimization of effort fit Peter says that the company in terms of its capacity and resources that focusing too much on core competence and success factors without taking into account each individual activity can lead to a false interpretation of the strength Rediscovering strategy The author divided the strategy into failure to choose the growth trap profitable growth and the role of leadership According to Porter a greater threat to strategy often comes from within the company rather than external changes that can pose threat to a company's strategy In the growth trap the desire to grow has the greatest influence on the strategy

Companies are continuously growing through new products new functions imitation of services from other companies etc Porter says that these efforts to grow blur singularity create commitments and undermine competitive advantage In profitable growth many companies try to grow with attractive products or services without first adapting them to their strategy It is necessary first to deepen a strategic position or otherwise it endangers your strategy In the role of leadership Leaders are responsible for deciding changes in the industry and should be able to teach others in the organization about the strategyThe strategy is what things need to do and what not to do The strategy requires continuous communication and clear discipline A strategy should guide employees to make decisions that arise because of the trade offs in their individual activities and in day to day decisions Conclusion It is very important that a company is aware that its rivals can easily copy the improvements in the efficiency of their company Activities such as the creation operation sale and delivery of the product the rivals can perform faster and better therefore the operational efficiency in their best practices is easily copied However rivals cannot copy your strategic positioning because this is done with similar activities in different ways this distinguishes your company from the others

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