What Is Strategy

“What is Strategy?” Porter Reading

1. What is the difference between operational effectiveness and strategy?

Operational effectiveness is when a company performs the same activities better than their competition. This can be achieved in many ways including, operating at a faster rate or reducing the scrap or defect rate.

Strategy is performing differently than the competition or performing the same activities in different ways. Companies intentionally operate differently to be unique, and increase their value.

The difference between the operational effectiveness and strategy is that operational effectiveness finds a temporary means to outperform competition, whereas strategy deliberately positions a firms’ function to perform differently. With operational effectiveness, a firms’ competition will eventually imitate the improvements being made and often do so very quickly.

2. Why does Porter say that some Japanese firms do not have a strategy? Do you agree or disagree? Why?

Porter says the Japanese firms do not have strategy as a result of their operational effectiveness nature. Most companies imitate each other, and rarely develop their own different strategic positions. They are constantly pushing out the productivity frontier. They are so quick to adapt to the advantages of the other Japanese firms that the margin for operational effectiveness is very small. Porter explains that the Japanese firms will need to learn and enact strategies to gain a competitive edge, which may be difficult due to the consensus-type culture in Japan.

I would agree that this is true, as it is evident in many of the Japanese companies’ products. For different companies, you can see that their products are very similar in terms of quality, product types, features, and price. They are constantly competing to lower their own cost, and very few stand out as a distinctly different company. I agree that they should develop strategy to advance their successes, and I believe it would...