Strategy Simplified
Demystifying core strategy concepts
Strategy is not an exact science. Academics, economists, authors and management consultants have developed several models, theories and frameworks to analyze an organization's business.
These models play a crucial role in defining the problem statement and possible solutions, but can often be overwhelming.
This section provides a byte sized summary of key models to demystify the basic concepts in strategy - with links to original source material for a more comprehensive understanding.
What is Strategy? Michael Porter HBR Classic
At general management’s core is strategy: defining a company’s position, making trade-offs, and forging fit among activities. A company can outperform rivals only if it can establish a difference that it can preserve. The essence of strategy is choosing to perform activities differently than rivals do. Strategic positions can be based on customers’ needs, customers’ accessibility, or the variety of a company’s products or services. Trade-offs are essential to strategy. They create the need for choice and purposefully limit what a company offers.
How Competitive Forces Shape Strategy - Michael Porter HBR Classic
Competition in an industry is rooted in its underlying economics, and competitive forces exist that go well beyond the established combatants in a particular industry. Customers, suppliers, potential entrants, and substitute products are all competitors that may be more or less prominent or active depending on the industry. services. The state of competition in an industry depends on five basic forces. The collective strength of these forces determines the ultimate profit potential of an industry.
Profit pools: A fresh look at strategy
Outlining Bain's profit pool concept, the authors describe the importance of creating strategies that result in profitable growth and states that managers need to look beyond revenues to see the shape of their industry's profit pool.