What Is Strategy

What is Strategy?

by Michael E. Porter

Harvard Business Review

Reprint 96608

HarvardBusinessReview

NOVEMBER-DECEMBER 1996

Reprint Number

MICHAEL E. PORTER

WHAT IS STRATEGY?

96608

STEPHEN S. ROACH

THE HOLLOW RING OF THE PRODUCTIVITY REVIVAL

96609

NIRMALYA KUMAR

THE POWER OF TRUST IN

MANUFACTURER-RETAILER RELATIONSHIPS

96606

JAMES WALDROOP AND TIMOTHY BUTLER

THE EXECUTIVE AS COACH

96611

AMAR BHIDE

THE QUESTIONS EVERY ENTREPRENEUR MUST ANSWER

96603

ROB GOFFEE AND GARETH JONES

WHAT HOLDS THE MODERN COMPANY TOGETHER?

96605

MICHAEL C. BEERS

HBR CASE STUDY

THE STRATEGY THAT WOULDN’T TRAVEL

96602

THINKING ABOUT…

THE HUMAN SIDE OF MANAGEMENT

96610

SOCIAL ENTERPRISE

PROFITS FOR NONPROFITS: FIND A CORPORATE PARTNER

96601

PERSPECTIVES

THE FUTURE OF INTERACTIVE MARKETING

96607

BOOKS IN REVIEW

INSIDE INTEL

96604

THOMAS TEAL

ALAN R. ANDREASEN

ADAM M. BRANDENBURGER

AND BARRY J. NALEBUFF

HBR

NOVEMBER-DECEMBER 1996

I. Operational Effectiveness Is Not Strategy

For almost two decades, managers have been

learning to play by a new set of rules. Companies

must be flexible to respond rapidly to competitive and market changes. They must benchmark

continuously to

achieve best practice. They must

outsource aggressively to gain efficiencies. And

they must nurture a few core competencies in the by Michael

race to stay ahead of rivals.

Positioning – once the heart of strategy – is rejected as too static for today’s dynamic markets and

changing technologies. According to the new dogma, rivals can quickly copy any market position,

and competitive advantage is, at best, temporary.

But those beliefs are dangerous half-truths, and

they are leading more and more companies down

the path of mutually destructive competition.

True, some barriers to competition are falling as

regulation eases and markets become global. True,

companies have properly invested energy in...