Strategy Analysis : Michael Porter Essay

Michael Porter states that strategy is about being different. It is about finding new ways to offer unique value to customers in a market. Many managers believe that operational effectiveness is strategy, but this is not true. Though operational improvements can be effective, focusing on improving every part of an organization can cause a company to distance itself further from a sustainable competitive position. Management must focus on strategic positioning, which occurs when a company is performing different activities from its competitors or they carry out similar tasks but in a different way. Strategic positions come from three sources. The first is variety-based positioning. This is focused on the variety of products and services

Strategy is a set of complicated tactics formulated by the executives of a company directed towards the achievement of company’s goal (Salmela, 2002). It is about all the path ways that a company would follow to reach its ultimate goal. It is a company’s strategy which helps to identify what it does better than the other companies in the industries, which may be different from what it does best. For successful strategy formulation and implementation, a company should know the needs of customers and should have knowledge of its competitors. Through a good strategy a company would identify that opportunity which makes it different from the others (Thompson, 2005).

Q1. “The generic strategy options of Porter are insufficient and inappropriate for today’s complex, hyper-competitive environment”. Discuss.

When a business forms a strategy they are producing a large scale plan with plans to achieve one or more goals set by the business. The factors that affect the plan, in both negative and positive ways, are uncertain. So when making a strategic plan a business will have to take into account all factors and plan for them. Strategy is imperative for a business as not only does it give them a sense of direction and some goals to achieve, but also resources are usually limited so you have to a strategy will help to guide the business and make the best use of the resources that they have. Strategy give the business direction, it helps them to see whether they are over achieving/under achieving and meeting the goals they have set themselves. If a

According to Meyer, (2010), strategy is the action that company can take to achieve its desired goals. When it comes to a company, thinking can be said to be either long-term or short-term. When translated into action, it is what is called operations or projects. However there are differences between operations and

Michael Porter’s article, “What is strategy?” sets to explain that both operation efficiency (OE) and strategy are required for reaching superior performance, but further clarifies and emphasizes the misnomer that OE is not strategy.

What is a strategy and why is necessary to have one? A strategy can be simply defined as a long term action plan for achieving a goal (InvestorWords.com, n.d., n.p.). Strategies are an integral part in the success of any company and are key in a company 's overall ability to accelerate its sales, gain market leadership, and really power up its revenue growth (Rowe, 2010, n.p.). In other words without a strategically developed strategy a company can not attain its future goals and objectives.

Corporate Strategy has been defined by numerous authors. Grant (1995) claims corporate strategy deals with the way a corporation manages a number of different businesses. Lynch, R, in both his third and fourth edition books on corporate strategy refers to Penrose (1959) definition of corporate strategy as “the pattern of major objectives, purposes or goals and essential polices or plans for achieving those goals, stated in such a way as to define what business the company is in or to be in and the kind of company it is or to be”

Harberber and Rieple (2008) define strategy as a set of intentional or inadvertent set of actions through which an organization develops the required set of resources, efficiently target valuable customers, meet financial targets and competes effectively. These strategic decisions drive the long-term direction of the organization, the scope of its activities, help gain advantage over competitors, and address changes in the business environment.

(To make a summary of the article while answering the question, the answer directly related to the questions are highlighted )

 In general, manager’s look at competition has been too narrow. There is a broad set of competitors that need to be looked at, which are described in “The Five Competitive Forces That Shape Strategy” by Michael E. Porter. The model explains that there are several other forces in the competition for profits that the strategist should be aware of when forming a stagey. Those forces determine the profitability of the industry and are the most important to look at when you are forming a strategy. These five forces are are the “industry structure” model which contain: New Entrants, Suppliers, Buyers, Substitutes, and Existing Competitors.

A company 's strategy consists of the competitive moves and business approaches that managers are employing to grow the business, attract and please customers, compete successfully, conduct operations, and achieve the targeted levels of organizational performance.

Onstruction industry in Lebanon has prospered and flourished in the last twenty years, especially after the end of the civil war. Despite the constant pressure that is caused by the political and regional crisis, the construction industry in Lebanon remains the most attractive and promising sector of the country’s resilient economy. Therefore, many construction companies were established, and competition increased and became more intense, due to the high profitability of this industry income. Specifically the luxury construction business, that started out first with few large companies that dominated this sector during the early nineties. Nevertheless, it attracted many new entries and this industry became very competitive, and this kind of competition for profits according to Michael Porter includes five competitive forces: established industry rivals, customers, suppliers, potential entrants and substitutes.

The strategy is commonly regarded as the prerogative of the business executive. The purpose of the business strategy is to achieve a competitive advantage, that is to say the ability to generate a sustainable profit higher than concurrent, although cases of companies whose performance remains permanently above market remain extremely rare. The business strategy is basically to answer three questions:

A strategy is said to be a plan that is made for the long term success of a product or brand. It is extremely important to have a strategy in order to figure out a direction towards which any company is able to focus all its resources efficiently and achieve desired outcomes. Formulating effective strategies is a considerably long process in itself that combines analysing several factors, situations and issues that are already present in a company and looking to improve on them alongside trying to implement various innovations and ideas to collectively create a direction towards which they can move and direct the resources available to them.