What’s your strategy?

michael porter

Before you answer the question, you may benefit from watching  “What is Strategy?”, a short video with Harvard professor Michael Porter:

Interesting video, isn’t it. After watching it, can you now  distinguish between operational effectiveness and strategy? You can read more on Michael Parter’s view on the subject in Harvard Business Review’s article “What is strategy?”

Do you agree with Professor Porter that competitive strategy is “about doing things your way”? About differentiating yourself to the customer, adding value that makes you distinguishable from your competitors? To simplify it, do you agree with him that strategy is both plan and position? Or would you simply define strategy as a method worked out in advance for achieving some objective? Now it’s time to answer the question posed in the headline, what’s your strategy? By the way, did you know that strategy is a concept that has been borrowed from the military? 

Video: Hung Le – You Tube

32 responses

  1. Catarina — I was in charge of training for a company I worked for (which was under communications and not human resources) and taught a management development course. Michael Porter is exactly right that companies and individuals mistake tactics for strategies. Outsourcing is a tactic, the steps you take to carry out a strategy. The strategy is to increase your margins to achieve the object of greater profitability. The move to consolidation — one failing company taking another failing company — to achieve scale has simply created a bigger failing company, like Hewlett-Packard buying Compaq. That almost toppled the company.
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  2. I have seen that way to often as a manager and an executive. Being able to discern the difference between strategies, tactics and goals is critical to achieving success in whatever your endeavor may be. That is not always as easy as it may seem. :)
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  3. Hi Catarina,

    The word he uses which is a simple one is "how" which is the strategy and separates the "what steps" which in marketing is the tactics. Agree with Jeannette and mistaking tactics for strategies and also objectives from strategies. The other mistake businesses make is thinking you need a strategy for a tactic which is wrong. You can't have a strategy for a tactic such as content or direct mail or twitter. Just think if you were developing strategies for all the tactics you would never implement anything.
    My recent post How To Make Informed Decisions To Attract Customers

  4. Thought provoking post, Catarina As others have said, there's a good deal of confusion around goals, strategies and tactics, with these often being used interchangeably. Essentially they are the difference between destination (goal), path (strategy) and the way(s) chosen to get along that path effectively – walking/running/riding, day/night, etc. (tactics).

    Operational effectiveness should be an ongoing tactic in any business, regardless of strategy.

  5. Yes, I agree – I think strategy is the overview of all the steps we take to be in the position we want to be, typically in a favorable position to your competitors. Interesting – I would love to hear some more from this talk by Michael Porter – I think I'll have to search it :)

  6. I agree. These two items often get mistaken for each other. Knowing the difference is key to the end goal of success.

  7. I think you lay out your goal and strategy in your initial business plan. In order to achieve the operational effectiveness to implement your proposed strategy, you need to employ "tactics". A successful enterprise needs to regularly re-evaluate whether a goal is realistic and whether their contemplated strategy for achieving it is operationally plausible. Just as in a battle, an enterprise that plows straight ahead implementing their strategy with blinders on risks never seeing the bomb that sinks them. (I probably need to do all this for my tiny blogworld.
    My recent post First Day of College — First Day of the Empty Nest

  8. Although not much of a business person but more of a right-side of the brain thinker, I learned something rather quickly from your video post, regarding steps versus strategy that is useful to me with regard to promoting my two recent books. Very enlightening, thank you.

  9. Catarina, wonderful video and post. Many people in the business world mistake these two important but separate things. When that happens productivity can come to a standstill. The work in tandem with each other but are definitely two separate entities.
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  10. I totally agree with Micheal Porter and admire his ability to explain in under two minutes what typically takes leadership teams a day locked away to understand. It's not even that its a difficult concept to understand, but since organizations spend most of their time developing and measuring the effectiveness of tactics and relatively little evaluating the strategy that its easy to forget why you were doing what you were doing.
    My recent post Transparency – Is it clear that it’s a good business practice?

  11. Strategies are long term approaches to solve problems? I break it down. Maybe keep it even simpler. I have a mission which gives me directions to set long term and short term goals. I will use x strategy to achieve each objective and goals by putting into place these actions and/or tactics. Hope I did not confuse the main points.

  12. Hi!
    Its an Amazing and informative post.
    Thanks for the amazing post. Would love to read more from you. Keep up the good work

  13. In my business as wonderful as your company maybe, people are price shopping, where you have to make a decision about where you want your margins. So I look at strategy as I need to come up with a choice about how I am going to be able to position myself. Do I want to offer my pricing lower, same or higher. So if I want to offer products lower, I will look to the supplier to offer me better pricing. Now I can decide how I want to position myself with my competitors. On the internet you are influenced by the demands of your customers. With that said you can not price yourself where there is no profit at all just so we can obtain business. So I need to position my business in order to achieve a profit that I can live with.
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