Review the article What is strategy? by Michael .E. Porter Essay

Michael Eugene Porter is a Professor at The Institute for dodge and Competitiveness, based at the Harvard Business School. He is gener totally(prenominal)y recognized as the father of the modern strategy field. One of his great writing is What is strategy? published in 1996.The initiation of the denomination raises a sneak of working(a) forte for Strategy that m whatever an(prenominal) companies had suffered for almost two decades. In the name, operational Effectiveness means performing similar activities better than rivals perform them. To attain this objective, companies based on its strength employ their best available technologies, skill, management, kind-hearted resource, eliminated wasted effort, motivated employees As the result of this, they could offer lower represent but superior look to the customers meanwhile moving toward the frontier. In this case, customers and suppliers legitimate a lot of benefit. But for the companies the fast and dramatic profit the y authoritative at the early time day by day became nothing. They practiced run faster and faster in the fetch upless race of running(a) Effectiveness, no wiz could win. One of the reasons for this is so irony. Competitors imitated the best practices in technology, management, arousal improvement. Therefore most of the companies look nearly the same. There were no struggle and competitive advantage anymore and the sinking price ever close to marginal damage. We fag end see it intelligibly in mobile telecommunicate market Samsung is cladding with the imitation from Chinese companies for warning Xiaomi. Those new entrants tack together a heavy threat on market sh ar and do Samsung lose a lot of coin.By finding out and bring up the matter really all the way, this article has shown the conflict in operating the companies. Managers direct tested to get the better but receive the worse. It explains why many companies got stuck in their management trap for almost twenty years. To make it clearer, a very typical example falls into Japanese companies which imitated and emulated one an another(prenominal), tried to satisfy any need fromcustomers. This stemma from Porter helps managers avoid mistake and remind them about strategy.In the game part of the article, the method to realize the matter is introduced Strategy rests on Unique Activities. Porter suggested that to avoid copying, and to be distinguishable, managers postulate to choose a different rigid of activities to deliver a unique mix of value, and perform activities different from competitors. It is Strategy mystifying including tercet sources The source one is Variety Based Positioning. The companies use this if they terminate create a picky product or service using distinctive set of activities to satisfy one common need of a group of customers. A very trustworthy example for this case is photoflash Lube International. It just focus on automotive lubricants, no other car repai r or maintenance service. Therefore, their service is faster at lower cost, persuading customer to get oil changes. This way will pull out customers with strong and specific need e peculiar(prenominal)ly the wise customers who believe in the advantage of specialization.The second gear one is Needs Based Positioning pith serving all or most of the needs of a particular group of customers. To illustrate this case, Porter showed a very excellent example of Ikera. This federation tried to serve all the home furnishing needs of its butt customers who were happy to trade-off service for cost and need stylish furniture, in-store fry care, extended hours. also according to the customers life period or special occasions, companies can offer different kinds of services, for example, BIDV bank can offer disciple a loan for study, after that another loan for buying car, fireside or when he needs some money for his wedding or business. The third base one is Access Based Positioning Se gmenting customers who are digable in different ways (geography, scale, or other differentiator that requires customizing of activities to reach this group of customers). For example, in Indian rural places where the roads were too deplorable that car and truck can not approach, Unilever group used local anaesthetic people to carry their products ( wash) and deliver tothe local people in those removed places. In practice, some companies likes Blackberries, Samsung can attract normal customers by advertise but for famous people who create the fashion trend and model communitys preference, the best way is sponsor or grown them the new expensive product as a present and paying them to use it. Anyway, there is an argument that is strategy doesnt mean quoin approach and the most important is that decisivenesson selecting a set of activities has to meet a group of customers common needs. The more valuable the bon tons position is the more attractive for rivals to imitate. Com petitors can reposition itself or straddling (Continental airline swear its full service while imitated Southwest tear-to-point routes, no meal, low fare). In order to make strategic position sustainable and avoid a burden of functions, companies have to trade-off. And it is mentioned in the third part of the article. Trade-off creates the need for choice and protects a seducest repositioning and straddles as sound as terminal point what a company offers. The company trades-off for three reasons the first is in consistencies in pick up or reputation. For example Neutrogena has built it image for medical reputation, other brand can not copy because of bulky expense. Some famous singers, actors or actresses never appear in small-time, unprofitable show or event which may blur their image and reputation. The second is from activities themselves, different position need different standards, method, and equipment (Ikea). A university lab manner is just used for teaching or checki ng models in simple cases. It can not be used to do business in interlocking case like the lab room in industry. Finally it comes from limit on internal coordination and control. Continental lost a lot of money when imitating Southwest to add a new service for point-to-point flight.However, in practice, trade-off is not low-cal. Its not sure to choose what to remain and what to name up. In psychology, managers always want to make their company grow. When seeing the competitors who are successful and get a lot of profit, its hard to rebuff without jump into that business. Therefore, trade-off requires thoughtful decision and sensitive impression. Furthermore, Porter argues that to gain competitive and sustainability every thing has to be Fit. That is the way activities contact to another. They are combined to fit and reinforce another. Activities can be performed by the piece but the give effect on each other. Since competitors are facing an entire ecosystem, with elements that allow and strengthen each other existence, they need to be very persistent, capitalize, or creative to be able to replicate or break the companys strategy. To break a single chopstick is easy but its impossible to do the same with a bundle. Samsungs success is achieved by a combination many aspects. Their productsare considerably designed by excellent designers who are often visit humans wonders, museum, and learn more knowledge from specialists. In addition, they have 33 technology centers for research. Their new management philosophy is another strong point, quality control and positive changes are extremely focused. On the other hand, bulky Thanh milk fell to get fit. Their product Lothamilk is really good on quality and preferred by customers but the conflict among the leaders, the problem in management, and weakness in promotion prevent them from being in the transgress and growth. In the last part, Porter mentions about Rediscovering Strategy. One of main point is Failure to choose. Managers have been confused about the necessity of making choices. Scaring of release behind, companies imitated one another rush to meet all the needs of customers. focal point on the efficiency frontier could lead one to think that companies should be able to beat its rivals simultaneously on all dimensions.Another one is Growth Trap that means blind pursuit of growth has a diluting effect on a companys strategy. Neutrogena suffered such a painful experience when they expanded into a wide variety of products eyes-makeup remover, shampoowhich are not unique and weaken their image. Everything became worse when they began turning to promotion. The second point is Profitable Grow Too often efforts to develop powerfulness harm the strategy but managers can choose suitable activities and cost to element their performance, deepen the long-term position. For example, Maytag organized it value brands into separate units with different strategic position while creating umbrel la appliance company for all its brands to gain critical mass. The last but not least important is The Role of Leadership. The managers making choice or decision is really important. They have to choose what to do and what to trade-off. In Samsungs management, when the CEOs decision is made, all the members in this company have to strictly follow without any other argument or objection. In conclusion, improving in working(a) Effectiveness is essential but its not enough because company need strategy for long-term success. Therefore, every company has to create preservable positive difference to set up it position, know how to trade-off, keep fit, and limber enough to adapt wit h major constructional changes in its industry.The article What is strategy helps the readers to find out the difference between operational Effectiveness and Strategy, Then managers can realize the way to develop a valuable and sustainable strategy to control the companys growth and maintain its composition as well as avoid mistake, and copy from the rivals. aft(prenominal) reading this managers can combine positioning, trade-off, fit together to have a good strategy. Italso shows us Strategy is the direction and capacity of an governing body over long-term, and it is very important for the success of any business organization. Besides all the arguments in the article are in a good order. At the beginning, the problem was raised, and then came many explanations leading the solution. Each argument is made clear by a typical example which is clearly analyzed. On the other hand, the subjects in examples are reused many times, that helps the readers feel long-familiar and understand deeply about every case. Moreover, the information in the article is really useful and practical for management because it is the result of a too-careful research based on real, practical situations of some famous companies from all over the world. In addition, the business reality reflected in this articl e clearly illustrates the theory in the book. Finally, it is well designed and easy to understand. Therefore, all readers from beginning or advantage levels can enjoy it and find something useful for them. The end