Strategy according to Porter

By Terje Bjrnsen
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lower costs
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Competitive
Competitive
position
position
Operational
Operational
Effectiveness
Effectiveness

Performing similar
activities better
than rivals.

Strategic
Strategic
Positioning
Positioning

Excellence
Excellence in
in
individual
activities
individual activities

Uniqueness
Uniqueness by
by
combining
activities
combining activities

Performing different
activities from rivals or
performing similar
activities in different ways.

Fit of activities drives competitive advantage and sustainability

Tools:
TQM
Benchmarking
Outsourcing
Reengineering
etc.

Strategic
positions
sources

Variety
based
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Choices: products?

Need
based

A sustainable
position require
trade-offs with
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Access
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Which Which
needs? way to reach
customers?

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Self-transport
by customers

Limited
customer
service

Ease of
transport and
assembly

Self-assembly
by customers
Knock-down
kit packaging
Modular
furniture
design

Wide variety
with ease of
manufacturing

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ample parking

Hightraffic store
layout

Self-selection
by customers
Limited
sales
staffing
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likelihood of
future
purchase
In-house
designed focused
on cost of
manufacturing

Ample
inventory
on site

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Most
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Year-round
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Low
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100%
sourcing from
long-term
suppliers

Source: M. E. Porter What is strategy HBR nov-dec 1996

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$%& '

%((&

th

Financial Times: Full of sound and theory, but signifying nothing; May 10 1999
9(

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*H7

B ( 00

iii

Henry Mintzberg: The Fall and Rise of Strategic Planning; Harvard Business Review Jan-Feb 1994

iv

Michael Hannan and John Freeman: The population Ecology of Organisations; American Journal of
Sociology, March 1977

Henry Mintzberg: Crafting Strategy; Harvard Business Review Jul-Aug 1987

vi

Michael E. Porter: Competitive Strategy; The Free Press, 1985