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IDREES WARIS 3095
Operational Effectiveness
It is the process of producing faster or with fewer inputs and defects than rivals.
How is achieved ?
Eliminate wasted efforts.
Employ advanced technology. Motivated employees better. Greater insight into managing particular set of activities. Operational effectiveness is necessary to compete but not sufficient to win.
Strategic positioning
Strategic positioning means doing things different from competitors.
Strategic position are often not obvious and finding them requires creativity and insight.
costs + prices =
profitability
STRATEGY
Competitive strategy is about being different Doing thinks differently than rivals do.
So, strategy is not serving customers but serving them better than others do by deliberately choosing a set of activities to deliver a unique mix of value. Example: southwest airline.
Wal-Mart
performance
entertainment
Toyota Sophisticated production system
Trade off
Trade off occur when the activities are incompatible.(mismatch) Trade off create the need for choice and protect against repositioners and straddlers. Example: Neutrogena's marketing strategy looks more like a drug companys than a soap makers.
Trade offs
Trade-offs create the need for choice and protect against re-positioners and straddlers. So strategy is defined as making trade-offs in competing. The essence of strategy is choosing what not to do.
Operational effectiveness
Operational effectiveness is about achieving excellence in individual activities.
Strategy
Strategy is about combining activities.
Simple consistency
Consistency between each activity and the overall strategy.
Example: vanguard align all with its activities with its low cost strategy.
Optimization of effort
Coordination and information exchange across activities to eliminate redundancy and minimize wasted efforts.
Example: product design choices can eliminate the need for after sale service.
Rediscovering strategy
Failure to Choose:
External changes can pose a threat to a companys strategy A greater threat to strategy often comes from within the company Do not understand the need to have a strategy Conventional wisdom Risking blame for a bad choice
product line, in which it was not unique) Adding new features Imitating competitors popular services Matching processes and Making acquisitions
Compromises and inconsistencies in the chase of growth eventually erode the competitive advantage of a company and their uniqueness with their rivals
Profitable Growth
Deepening a strategic position by:
Distinctive activities Strengthen fit