Operational effectiveness (performing similar activities better than rivals) is not the same as strategic positioning. While operational effectiveness is important, it does not lead to sustainable competitive advantage as best practices can be easily copied by competitors.
True strategic positioning involves creating a unique and valuable position by performing different activities from rivals or performing similar activities in different ways. This requires making trade-offs and creating fit among a company's activities.
Three key principles of strategic positioning are:
a. Serving a few needs of many customers, broad needs of few customers,
a. Serving a few needs of many customers, broad needs of few customers,
or broad needs of many customers in a narrow market.
b. Making trade-offs in competing - choosing what not to do.
c. Creating "fit" among a company's activities so they mutually reinforce each other.
Companies need to provide clear guidance to employees on how to deepen their strategic position rather than compromise it. Strategic positioning and leadership are closely linked.
In summary, the article argues that true strategy is about creating a distinctive strategic position, not just striving for operational effectiveness. This requires discipline, trade-offs, and aligning a company's activities.
Cre: Michael E. Porter
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