Strategy: Confused? You’re not alone. Here’s what the Masters say (in under a minute).
- Michael Porter, Competitive Strategy Guru: “Strategy is choosing to perform activities differently than your rivals.”
- Peter Drucker, Management Consultant: “Strategy asks a simple question: What business are we in?”
- Kenichi Ohmae, Management Thinker: “Strategy is a set of interrelated decisions that define the long-term direction and competitive advantage for an organization.”
- Henry Mintzberg, Management Strategist: “Strategy is the pattern in a stream of decisions.”
- K. Prahalad, Management Professor: “Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.”
- Richard Whittington, Professor of Strategy and Management: “Strategy is the direction and scope of an organization over the long term: which markets to serve and how the value proposition will be delivered.”
1. Michael Porter, Competitive Strategy Guru: “Strategy is choosing to perform activities differently than your rivals.”
- Porter’s view places emphasis on the actions of a company as the core of strategy. Rather than simply trying to be the best in the industry, successful firms must choose activities that diverge from the competition, creating a distinctive way of delivering value to customers.
- Example: Southwest Airlines chose to focus on short-haul flights, quick turnaround times, and no-frills service to offer customers convenient and affordable air travel. This was distinctly different from legacy airlines at the time who favored longer flights, hub systems, and more comprehensive service.
2. Peter Drucker, Management Consultant: “Strategy asks a simple question: What business are we in?”
- Drucker emphasizes focus. Before choosing a specific course of action, a company must define the arena in which it intends to operate. Is the business primarily about technology development? Providing financial services? Manufacturing specific products? This self-knowledge is critical for making strategic choices later.
- Example: Apple was known primarily as a computer company before the iPod and iPhone transformed its focus to broader consumer electronics and user experiences.
3. Kenichi Ohmae, Management Thinker:
“Strategy is a set of interrelated decisions that define the long-term direction and competitive advantage for an organization.”
- Ohmae looks at the bigger picture. Instead of individual choices, strategy becomes an interconnected system of decisions reinforcing a company’s desired competitive position over the long haul. The emphasis is on sustainability of advantage.
- Example: Amazon’s focus on superior logistics infrastructure, wide product selection, and a customer-friendly service model created synergies that have driven their success, making it difficult for competitors to replicate
4. Henry Mintzberg, Management Strategist:
“Strategy is the pattern in a stream of decisions.”
- Mintzberg acknowledges that strategy is fluid. It isn’t necessarily mapped out in a detailed plan in advance. Instead, it may emerge from the choices a company has made over time, revealing a consistent pattern of action.
- Example: Google began as a search company, but their history of experimenting with and acquiring new technologies revealed a broader strategy of pushing the boundaries of information organization.
5. C.K. Prahalad, Management Professor:
“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.”
- This echoes Porter’s view, stressing that true strategy isn’t just about being good, it’s about being unique. It recognizes that a company can’t be everything to all people and must make choices that favor a particular market segment and way of offering value.
- Example: Rolex positions itself as a luxury watchmaker, their strategy is not to be the most affordable brand, but to be the pinnacle of craftsmanship and status.