Review Of What Is Strategy

1268 words - 6 pages

Review of What Is Strategy

Introduction

The article---‘What is strategy’ is mainly concerned with exploring the definition of the strategy by distinguishing ‘operational effectiveness’ from ‘strategy’. To explore the real meaning of strategy, the author defines this term from three different perspectives: strategic position, trade-offs and fit.

Main part

Understanding of the article

Some concepts of this article are based on theoretical foundations. Firstly, operational effectiveness is based on the Five Forces Frame Work (Porter, 2008), as its definition ‘performing similar activities better than rivals perform them’ (Porter, 1996) links with external environment, especially ...view middle of the document...

Moreover, the case of Southwest Airline in the article could be understood from another perspective: Blue Ocean Strategy (Kim and Mauborgne 2005). The strategy that Southwest Airline adopts is low-cost and point-to-point avoids their competitors, creates a new market and attracts price-sensitive consumers, and this could be reflected in blue ocean strategy regarding to the new demand, market to create, differentiation and cost leadership aspects.

Discussions with other literatures

Some other literatures also address some important points. Firstly, operational effectiveness could help organizations higher their productivity but could not persist a sustainable advantage (Santa, Hyland, and Ferret 2014), and this is consistent with Porter’s. Besides, Rotaru (2012) restates the relationship between operational effectiveness and strategy with more specific examples and agrees with the Porter’s opinion. However, there are some divergences toward to the definition of strategy. Phillips (2011) argues that strategy is the way to achieve mission beginning with understanding of the context and organizational core values by analysis of SWOT and PESTEL. Obviously, it is contrasted with Porter’s (RBV) as Phillips emphasizes on external environment. According to Jonas (2000), he indicates that strategy is the plan that allows the company to accomplish the mission. Moreover, the PSR Troika explain that the strategy could be bested understood when viewed as an element of a troika that includes policy, strategy, and resources (Davies, 2000). To sum up, compared with these literatures, we could conclude that there is no consensus exists about what strategy is and any arbitrary definitions are flawed.

Strengths and weakness

One of the strengths is that Porter did not define the strategy in a single angle, while he defines it from three perspectives. This means that he defines it by a relatively flexible way to avoid absolutization. Besides, although he mainly defines strategy by the theoretical foundation of RBV, he also suggests that a company may have to change strategy if industrial structure changes. This means that he also considers fully that strategy should be put in a wider context. Nevertheless, compared with other literatures, the way this article defines strategy is inclined to analyze internal environment. Actually, the analysis of external environment also plays an important role in defining it. Another shortcoming is that there is no any data or survey to support the arguments. Although he lists some examples to support these concepts, they seem to be less convincing without supplement of actual data.

Practical implications

This article not only gives many positive practical implications in the real business world, but also some pints of it are conflict with the reality. Firstly, this article implies that operational effectiveness may produce absolute improvement for organization, but it leads to relative improvement for no...

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