What is Strategy?
Discussion Questions
Operational Effectiveness
1. What does Porter mean when he says that
“operational effectiveness is necessary but not
sufficient”?
Differences You Can Preserve
2. Explain what Porter means when he says, “A
company can outperform rivals only if it can
establish a difference that it can preserve.”
Operational Effectiveness and Activities
3. According to Porter, operational effectiveness
means performing similar activities better than
rivals. Is it possible to achieve a competitive
advantage in this way? If so, how long will such
an advantage likely last?
Productivity Frontier
4. What does Porter mean by a productivity
frontier? Is it desirable for a company to seek
to be at, or near, this frontier?
Productivity Frontier Over Time
5. What does operational effectiveness
competition do to the productivity frontier over
time?
Competing through Operational Effectiveness
6. Why then is it very hard to compete
successfully solely on the basis of operational
effectiveness over a long period of time?
Operational Effectiveness vs. Strategic Positioning
7. Contrast operational effectiveness with strategic
positioning. In strategic positioning how would
a company attempt to perform important similar
activities relative to its rivals?
Competitive Advantage and Activities
8. Would a company seeking to establish
competitive advantage focus exclusively on
similar activities to those of its rivals? Explain.
Strategy and Continuous Improvement
9. According to Porter, continuous improvement
(while desirable) can draw companies toward
imitation and homogeneity. Does this
contribute to strategies that differentiate a
company from its rivals?
Strategy and Being Different
10. Porter claims that competitive strategy is
about being different. What does he mean by
this?
Strategy and Being Different: Southwest Airlines
11. What are some of the important ways
Southwest Airlines utilized this idea?
Strategy and Being Different: IKEA Furniture
12. What are some of the important ways the
IKEA furniture company utilized this idea?
Variety-Based Positioning
13. Variety-based positioning is based on offering
only a subset of an industry’s products or
services? How did Jiffy Lube’s business
model demonstrate this?
Variety-Based Positioning
14. Do you think the I/S Division utilizes this?
Explain?
Variety-based positioning is based on offering only a subset of
an industry’s products or services?
Strategy Positions: CarMax
15. Porter points out that some strategy positions
are already available to existing companies,
but are exploited first by new entrants. He
gives CarMax as an example. What activities
relative to selling used cars did CarMax do
differently than established car dealers?
Sustainable Advantage
16. Porter states: “Choosing a unique strategic
position, however, is not enough to guarantee
a sustainable advantage.” What is the main
threat to achieving sustainable advantage?
Sustainable Positions and Tradeoffs
17. Porter asserts that strategic positions are not
sustainable unless there are tradeoffs with
other positions. What does this mean?
The Straddler Approach
18. The straddler seeks the success of a
competitor and tries to imitate it while
maintaining its existing position. Does this
usually work?
How did this work for Continental Airlines with
their Continental Lite service in its competition
with Southwest?
Tradeoffs: Southwest Airlines
19. Porter claims that tradeoffs arise from the
tailored activities that are chosen to enable a
strategic position. Give examples of this from
the Southwest Airlines example.
Tradeoffs: The I/S Division
20. Can you identify some tradeoffs the I/S
Division makes by adopting the approach to
leverage a fully integrated architecture?
Strategy and Combining Activities: Southwest Airlines
21. Porter makes the following statement: “While
operational effectiveness is about achieving
excellence in individual activities, or functions,
strategy is about combining activities.”
Relate this to the Southwest Airlines strategy
of rapid gate turnaround. In other words how
does this relate to how Southwest performs
other activities?
Strategy, Activities, and “Fit”
22. Porter discusses the need for fit among a
company’s chosen activities. How do the
various activity choices made by Southwest
Airlines “fit” within their overall strategy?
Imitating Activities
23. How easy is for a competitor to imitate a single
activity you might choose to do? What might
this depend on? Explain.
Interconnected System of Activities
24. How does creating an interconnected system
of activities relate to creating sustainable
advantage?
Strategy and Internal Pitfalls
25. Porter asserts that the greatest threat to
strategy often comes from within a company
rather than from without. What does he mean
by this? What is a common internal pitfall for
creating successful strategy?
The Growth Trap: Maytag
26. What does Porter mean by the “Growth Trap”?
How did this play out at Maytag?
Growth Trap and Profitability
27. How does understanding the growth trap help
a company achieve more profitability?
Operational Effectiveness Revisited
28. Does Porter advocate ignoring an emphasis
on operational effectiveness? Explain?
Leadership and Strategy
29. Why is leadership so important for establishing
a clear strategy?
Strategy and Organizational Choices
30. How does strategy relate to organizational
choices?
Leadership Alone?
31. Can leaders alone implement a successful
strategy?