When I wrote about the ‘Framework No. 3: What is a (product) strategy, really?’, one of my colleagues from XING pointed out to look at Michael Porter’s foundational HBR article ’What is strategy?’ from 1996. You can read my colleague’s thoughts about the article here.
And the article is of course very worthwhile to read. I very much like his emphasis that the various parts of a strategy have to fit together to be more than the sum of the parts. Also, his account of classifying the various ways of capabilities and opportunities is helpful when thinking about your strategy.
Michael Porter makes a very important point, yet somewhat implicitely: there is no such thing as a universal best strategy. Every company has to find an individual strategic positioning that makes use of its assets and is increasing the likelihood of survival.
There a two things I don’t like that much about the article. First, Michael Porter is not giving a precise definition of strategy. In fact, I found at least 10 statements that talk about what strategy is:
- Positioning is the heart of strategy
- Competitive strategy is about being different
- The essence of strategy is in the activities; choosing to perform activities differently than rivals do
- Strategy is the creation of a unique and valuable position
- (Positioning) trade-offs are essential to strategy
- Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do
- Strategy is about combining activities
- Strategy is creating fit among a company’s activities
- At the management’s core is strategy: defining a company’s position, making trade-offs, and forging fit among activities
- One of the most important functions of an explicit, communicated strategy is to guide employees in making choices that arise because of trade-offs in their individual activities and in day-to-day decisions
In addition, I feel that Michael Porter is arguing very technical. He is not talking about the purpose of a company. If people really believe in the purpose of a company, it creates tremendous energy that cannot be copied by competitors.
But read for yourself – link share: What is strategy?