SUMMARY OF ARTICLE

What is Strategy? By Michael.E.Porter

MBA Program
Fall 2014

Submitted To

Instructor Iqbal Mehmood

By

Daneyal Mirza
L1F14MBAM7012

hat is strategy? Is a question many management gurus tried to explain but failed, but this
article of Michael Porter comprehends the complexity of the term strategy and explains
the ever arduous and strenuous phenomenon strategy quite potently in a manner that all

modest learners of management can easily extrapolate.

He starts by pounding the old mantra of Operational Efficiency and calling it deficient and inadequate
to be the only choice to competitive advantage. OE is all about benchmarking competition, absorbing
best drills, refine productivity and constitute efficiency. OE emphasizes on pulling off activities in a
better, outmatched, transcended way. Porter calls for pursuing constant variation and remodeling to be
classified as flexible or fluid which is of utmost importance in todays ever elastic business environment.
The problem in OE starts when it reaches the very heights which is termed as Productivity Frontier,
which encompasses the use of the outclasses practices by all of the players in the market hence putting
everybody on the same page and in more financial terms, the profits die out due the indistinguishable
ways of getting efficiency between the players. Hence making them look-alikes of each other leading to
nowhere. Therefore giving strength to the argument of the inadequacy of OE being the only way to gain
advantage.
Whereas porter enforces the use of Competitive Strategy for sustainable advantage because its all about
being the most distinct, novel and non-identical. Therefore making the players commit things in a very
distant way to others or executing activities which are novel in nature leading to a healthy competitive
advantage. For further clarification, he classifies the origins of strategic positions into three classes
namely variety based positioning, needs based positioning and access based positioning targeting the
subsets of products, satisfying a niche and playing with the geographical factors respectively. But
keeping in the mind the dynamic nature of the market, the player must not lose the variation capability
and should not be complacent at all.

urther digging into the constituents of a successful strategy, porter explains the need of making
tradeoffs, because you cannot be all things to all people, it will be mess of conflicting
priorities. He emphasizes on the need of potent specialized areas through which CA should be

derived. And as we all know that things organized together in a neat manner are always better than
loosely attached strings, therefore a Fit should be maintained in all the functional areas of the company.

Hence promoting coordination leading to effective operations and keeping everybody on the company
on the same page regarding your overall strategy. He introduced three types of fits namely simple
consistencies, supporting nature and optimized coordination, claiming the latter one to be the most
perfect for sustaining CA.
Being active and beware of the external changes is also a part of his articles viewpoint, that the
external factors do effect the success of the company but by no means it can over take the danger the
company is opposed to from within the organization. So the inconsistencies has also been named by
porter in the article that are competing priorities, functional boundaries and poor vision to name a few.
Hence its a balancing act of managing the internal inconsistencies with the dynamic external jungle of
vicious players who wants a piece of you.

oncluding the article porter forces huge amount of pressure on maintaining what you already
have gained i.e. the competitive advantage and never let go of it. And build even deeper
foundations on it hence creating your non-erodible advantage in the market and making you

less vulnerable to the ever changing nature of the competitive jungle you compete in.