Michael porter has outlined strategy in a broad way. His work is based on research into various companies and industries. In his discussion, he has managed to put together a variety of ideas that have helped him come up with tangible definitions of strategy and management issues. This essay defines strategy according to Porter and discusses the differences between strategy and management as put in Porter’s, ‘What is Strategy’.
Porter (62) defines strategy in terms of operational effectiveness. According to Porter, in this case strategy goes hand in hand with operational effectiveness, where the latter is mainly about the doing same things in a better manner than the rivals. Porter goes ahead to define strategy as a matter of difference in the performance of business activities.
In this realm, he has exemplified the aspect of strategy by using organizations that have succeeded in strategic positioning, such as South West airline and IKEA. Using this perspective, strategic competition has been perceived as coming up with novel positions that will be able to attract customers in a better manner than that of the rivals.
Strategy according to Porter is mainly based on the needs of the customer and issues that will satisfy the needs of the customer. In the article, Porter has defined strategy as the act of creating positions that are unique and valuable through the use of varying activities (Porter, 68).
From this argument, it has been made clear that the essence of strategy is all based on creation of a position that is different from that of the rivals such that, one gets a competitive advantage.
Creation of the position is not a straightforward guarantee to competitive advantage over other rivals (Porter, 68). In such a case, it is necessary to have tradeoffs, where a business can choose to shrug off some factors and insist on others.
Tradeoffs, as a strategy, may seem like a limit to what a company is offering but they tend to increase the strategic positioning of the particular company. In this realm, strategy has thus been defined as the use of tradeoffs in competition by sacrificing some offers for others (70).
Fit, amongst activities in an organization, has been described as a very important aspect of strategy. In this realm, activities should be in such a manner that they are consistent with each other, reinforce each other, and are able to optimize the efforts of the company in achieving its objectives. When this happens, the organizational structure will enjoy competitive advantage in a sustainable manner.
According to the discussion laid out by Porter, strategy is an aspect of management. It is a core part of management (Porter, 77). The management of an organization is responsible for laying down strategy. There is a difference between the two terms, such as laid in the facet of operational effectiveness. The latter is an essential integral of management but does not stand out to be a strategy.
Strategy is thus a management principle, where, the position of a company can be defined, tradeoffs made and a fit amongst activities forged. This aids the organization or the company in maintaining of a competitive and sustainable advantage.
Managers are responsible for maintaining strategy for various organizational needs. They are responsible for making decisions on what to do and what not to do in the organization, as dictated by the set strategies.
Reference
Porter, M. (1996). What is Strategy? Harvard Business Review, 74 (6), 61-78.