Strategy

What is Strategy?
By Michael E. Porter


Over the past nearly 20 years, the managers learned how to play with some new rules. Businesses must also flexible in responding to the rapid changes taking place in the competition and the market, continues to perform benchmarks for the achievement of efficiency and retain some core competencies that are not lagging behind its competitors ..
Positioning, who had advanced heart of the strategy, no longer used because it was considered too static in the face of such dionamis markets and rapid technological change. According to the new dogma, its competitors would quickly imitate any market position, and competitive advantage then became temporary.
But all it contains half truths that could be dangerous, and lead more companies to track competition destroy each other. True, that some of the obstacles to compete to be lost because the rules become much simpler and markets become global. True, that companies invest its energy more wisely in order to become increasingly lean and agile. However, in many industries the so-called hyperpersaingan become a troublesome wound himself, and not be terlakan not result from a paradigm of competition is changing.
Root of the problem lies in the failure to distinguish between operational efktivitas with strategy. Research is being done to raise the level of productivity, quality, and speed emnghasilkan a large number of tools and management techniques such as total quality management, benchmarking, time-based competition, outsourcing, partnering, reengineering, change management. Despite successfully making operational improvements are dramatic, many companies are experiencing frustration at not being able to translate what they got into sustainable profitability. And little by little, almost nothing felt, replace the management tools strategy. Effort from managers to make progress in all sectors and even make them stay away from the competitive position.

EfektifitasOperasional: Need But It Is Not Enough
A company can only beat its rivals if they can create a uniqueness that can be retained.
Similarly, the differentiation comes from the choice of activities and how activities are performed.
A wave of industry consolidation that occurred recently through the merger into the competition can be understood in the context of operational effectiveness. Driven by pressure to improve performance but is less supported by a strategic vision, almost all companies have no idea other than to buy companies that are competitors. Companies that live longer than others, and not a company that has a real advantage.

2. The uniqueness of the strategy is largely determined by activities
The essence of competitive strategy is a difference. The point is deliberately choosing a different group of activities in order to produce a unique combination of values.
Strategic positions emerge from three different sources, which are interrelated to one another and tend to complement each other. First, positioning can be based on ativityas producing some of the products or services) for the basic choices made atasa variety of products or services and not on customer segments. Diversity bersdaarkan positioning new product / service has economic sense when a company can very well produce a particular product or service using a different set of activities.
People who use Vanguard or the Jiffy Lube chain responds to the best value for a particular service type. Based on the diversity of positioning products / services to serve customers in large numbers, but most serve only a fraction of their specific needs.
On the positioning of the second kind, the company serves all or even all of the needs of a particular customer group. I call it by positioning on a needs basis. Positioning of this type is similar to the traditional ways of thinking in which the intended target was a group of customers who have needs which berlain differently and this need can be served by a group Threaded activity. There are groups of customers more price sensitive, ask for a different product features and require different kinds of information, support, and service.
Other types of positioning based on this requirement is when the same customer has different needs in different situations or for different types of transactions. The same person, for example, might have needs that are not the same when traveling on business than usual when traveling with family.
Almost all managers are relying on their intuition in formulating their business patterns that match customer needs. But the most important element of need-based positioning is not at all intuitive, and often ignored. The difference in this need not be transformed into a position which means that if the activities undertaken to meet those needs are no different. Had not the thing that is the problem, then each competitor should be able to meet those same needs, and there is no unique or valuable things about positioning.
Positioning the third type is a segmented customer that can be accessed through a variety of ways. They have the same needs with the needs of other customers, but differ in terms of setting activities undertaken to reach these consumers. I call it by positioning based access. Access can function as the geographic scale of a customer or customers or anything that needs a different set of activities to achieve our customers with the best way.
Regardless of who becomes basisnya_____________ diversity, needs, access, or a combination ketiganya______positioning requires a number of activities Threaded because it always presupposes the existence of differences in terms of distribution, namely the differences in terms of corporate activities. But positioning is not selamanyamerupakan difference function of the demand side or the customer. Positioning is based on diversity and access is not dependent on any differences that existed at the customer. However, in practice, the differences in terms of diversity and access are often accompanied differences in needs.
After defining the positioning, we can now begin to answer the question, "What is strategy?" Strategy is about creating a unique and valuable position, involving a variety of corporate activities. If in case there is only one ideal position, then there should be no strategy. These companies will be faced with even just one simple guide, which won the race to discover and master ersebut strategy. The essence of strategic positioning is to choose activities that are different from those made by competitors. If only the same activities as the best way to generate all the variations, to meet all needs, and can access all customers, the company will easily use interchangeably and operational effectiveness will be the determinants of firm performance.

3. In order for Sustainable Can, A Strategic Position Requires Trade-Offs
But a strategic position will not last long if there is no exchange (trade-off) to another position. Trade-Off occurs when the company's activities conflicting with each other. In simple terms it can be said that the trade-off means that the excess in one section requires a reduction in other fields. An airline may choose to serve the meal while raising costs and shorten time to stop on the runway, or could choose not to do it, but it can do both without bear the cost of inefficiency.
Trade-off arising by three reasons. The first is the inconsistency in terms of image or reputation. A company known as a company that produces one kind of value could be the lack kreditibilitas and confusing customers - or even damage the reputation __jika he produces other types of goods or try to produce two goods are not the same at the same time. Ivory soap, for example by its position as a cheap soap will find it difficult to reshape its image in order to align with Neutrogena's reputation as a company that sells medical soap premium level (secondary and above). Efforts to create a new image will have cost tens or even hundreds of dollars on big industries __ and this is certainly a very big obstacle to imitation.
The second and more important reason is that trade-off arises from aktivitasperusahaam itself. Psoisi different (with a range of activities) require configuration (structure) of different products, different equipment, different employee behavior, different skills and different management systems. Many trade-off that illustrates the lack of inflexibility (infleksibilitas) in the case of machines used, employees who are employed, and the system is applied. The more Ikea configuration of activities to reduce cost by allowing their customer to do the assembly and delivery, the more he is less able to satisfy customers who demand a higher level of service.
However, the trade-off can be even more fundamental. In general, the value of destroyed if an activity designed redundantly or not designed properly. For example, although a sales rep can provide valuable assistance to a client and ignore the other customers, the product or service offerings (and some of the costs of issuance) will be in vain for customers in the second. In addition to increased productivity when the variation of an activity is limited. By always providing valuable assistance, salespeople and entire sales activity can often learn and achieve efficiencies of scale.
Finally, a trade-off occurs because of the limited coordination and internal controls. By choosing to compete in one way and not the other way, senior management makes the organization become more clear priorities. Conversely, companies that tried to be anything for all customers, at risk of confusion as employees try to make daily operational decisions without a clear framework.

4. Encouraging Competitive Advantage Adjustment and Resistance
Positioning choices not only determine the activities to be undertaken by a company and how each activity have been prepared, but also how those activities relate to one another. Operational effectiveness associated with achieving the best level in performing each activity or function, while the strategy of combining related activities.
Level Adjustment and sustainability (Suatainabilitas)
Strategic adjustment among many activities is fundamental not only for competitive advantage but also on the sustainability of these advantages. More difficult for competitors to match a group of activities connected to each other than to imitate a particular sales force approach, adapting the technology to process, or imitate a group of features (features) of the product. Positions built on systems of activities far more lasting than the position which is built on the activities individually.

5. Finding Return Strategy
Failure to choose
Usually people think that the threat to come from outside the company's strategy as a result of changes in technology or the behavior of competitors. Although external changes can be a problem for the company, the threat to the strategy often arise from within the company. A good strategy is often undermined by misconceptions about the competition, by the failures that occurred in the organization, and more specifically the desire to expand.
Stunned by predictions about hiperkompetisi, managers increase the ability of the company with a way to imitate what is being done by our competitors. Because urged to think revolutionary, managers chase every new technology in order to save themselves.
Effort to find the operational effectiveness becomes excited because it was considered more concrete and actionable (can be applied). During the past decade, managers are under pressure to improve performance significantly and can be measured. These programs resulted in operational effectiveness menetramkan progress, despite the high profitability could remain elusive. Publications and business consultant flooding the market with information about what is being done by other companies, which triggered the emergence of mentality to do the best. Stuck in a race to achieve operational effectiveness, many managers feel well that they do not need a strategy.
Growth Trap
Of the many influences, the desire to develop good time to have the worst effects of the strategy. Offi-border trade and the things that seemed to insist that companies need to grow and develop. Serve a group of customers and ignore the other customers, for example placing reasonable limits for revenue growth (revenue). Strategies with broad targets that emphasize low prices could result in a loss of sales to customers who attach great importance to the quality of the product or service. Conversely differentiation strategy does not generate sales to customers who are sensitive to price.
Profitable growth
Many companies after restructuring and cost savings, diverting their attention on the company's growth. Often, too, attempts to blur the uniqueness of that growth, leading to a compromise, reducing the adjustment and ultimately damaging the competitive advantage. And in fact, the desired level of growth even endanger the strategy.
What action to maintain growth and strengthen the strategy? In general, the instructions are in order to concentrate more on efforts to deepen a strategic position and not expand and mengkompromikannya. One approach is to look for strategies that trigger the expansion of existing activity system by offering privileges or services that can not be imitated by its competitors or those who do not charge a fee slightly if only relying on one event only. In other words, managers can ask themselves how the activity, how the privileges or form of competition is how, which can be measured or do not harm them because of the company's activities are complementary.
Globalization is often the driving force of growth consistent with its strategy, which opened big markets for a focused strategy. Unlike the expanding activities in the country, to expand globally and further encourage the formation position of a company's unique identity
Leadership Role
Challenge to develop or rebuild a strategy is often highly dependent on the nature and organizational leadership system that is applied. With so many workers who do not want to make choices and trade-offs in organizations, a clear intellectual framework to guide the strategy is something that is needed in order to maintain balance. In addition, the existence of strong leaders who can make pilihanmerupakan something essential.
In many companies, leadership was not reduced in rank to be more than just leading the improvement of operational activities and conduct transactions. But now, the role of a leader is much broader and more important. General management is more than just a job to handle individual functions. The point is strategy: defining and communicating the company's unique position, making trade-offs, and making adjustments between the activities of the company. A leader must be disciplined in mnentukan the changes which the industry and customer needs which will be responded by the company, while avoiding the disruption of organizational and still maintain distinctiveness of the company. Managers at lower levels usually lack the perspective and confidence to have a strategy. There will be a constant pressure to compromise, to loosen the trade-off, and compete with competitors. One of the many jobs performed by a leader is to teach to others in the organization about strategy --- and to say no.
The strategy provides a choice about what not to do and what to do. Setting limits is one of the other functions of leadership. Deciding which groups to target customers, product variations, and which customers need to be served by the company is something fundamental in developing a strategy. But so is deciding to not serve customers or other needs and do not offer a particular product or service model. So, the strategy requires constant discipline and clear. One of the most important functions of an explicit and communicative strategy is to guide employees in making choices that arise because of the trade-offs in each of the activities they do and in daily decisions.
Improving operational effectiveness is an important part of management, but it is not a strategy. While experiencing confusion with those two things, the manager accidentally backed into ways of thinking about competition that drives many of the industry towards convergence (convergence), which compete, which is not beneficial to anyone and can not be avoided.
Managers must be able to distinguish between operational effectiveness strategy. Although it is an essential thing, the two agendas are not the same.
Operational agenda involves continual improvement everywhere and there is no trade-off. Failure in doing this will decrease resistance even for companies that have a good strategy though. Operational agenda is the perfect place for constant change, flexibility, and a relentless effort to achieve the best performance levels. Conversely, strategic agenda is a good place to define a unique position, making clear trade-off, and tighten the adjustment. Inside erkandung businesses are constantly looking for ways to improve and expand the company's position. Strategic agenda demands discipline and continuity, and its main enemy is the confusion and compromise.