Qu'est-ce que la stratégie ?

What is strategy?

1) Operational effectiveness is not strategy

Today we observe failure of many companies: many don’t manage to translate gains into profitability. It is often attributed to hypercompetition. Actually, the root of the problem is the failure to distinguish between operational effectiveness and strategy.

While operational effectiveness means performing similar activities better than rivals, strategic positioning means performing different activities from rivals’ or similar activities in different ways.

It is important to know the difference because operational effectiveness is often not enough to succeed because rapid diffusion of best practices and competitive convergence due to benchmarking.

2) Strategy rests on unique activities

We need to make differences between strategy, competitive strategy and strategic positions.

Competitive strategy means deliberately choosing a different set of activities to deliver a unique mix of value.

However, strategy lies more in the activities either perform activities differently than rivals or perform different activities. It is the creation of unique and valuable position, involving a different set of activities.

Finally, strategic positions have three sources to define them: variety-based (based on the choice of product), needs-based (based on serving all the customers’ needs) and access-based positioning (based on customers’ segmentation). Here, the essence is to choose different activities than rivals’.

3) A sustainable strategic position requires trade-offs

Indeed, we often observe that it isn’t possible to achieve a sustainable advantage if there are no trade-offs. Choosing a unique position isn’t enough to get that competitive advantage because of reposition and straddling.

This is the reason why trade-offs have become popular, especially when activities are incompatible. They arise mainly because of inconsistencies in image, a need for flexibility in people and systems, and because it’s a great strategic tool. Indeed, it allows the company to get into several businesses to satisfy more customers.

Finally, we could say that rise-offs are useful because they create the need for choice and protect against straddlers and repositioners.

4) Fit drives both competitive advantage and sustainability

Strategy is creating fit among a company’s activities.

Strategic fit creates competitive advantages and superior profitability and it’s important because discrete activities often affect one another. Indeed, if there’s no fit among activities, there is no distinctive strategy and little sustainability.

The most valuable fit is strategy-specific because it enhances a position’s uniqueness and amplifies trade-offs.

There are three types of fit: simple consistency between each activity and overall strategy (makes the strategy easier to communicate), reinforcing of activities (by cutting costs or increasing differentiation)

...