Prof Michael Porter gave a lecture about Strategy at Havard Business School to a couple of CEO's .
Here are 5 key takeaways from that lecture:
Here are 5 key takeaways from that lecture:
1. Strategy is about creating value for customers you choose to service. Strategy is all about choice, and the most fundamental choice is who you choose to serve. the worst mistake you can make is to try serve everybody( you cannot meet the needs of every customer)
2.Another common mistake companies make is getting into competition with your competitor on the same thing. If your competitor is trying to be the lowest cost, it's hard to win if you try to chase them at being low cost. Strategy is all about finding a unique position .
3. Strategy is a set of long term choices we make to distinguish ourselves from competitors. If you doing the same thing as your competitors you don't have a strategy, you are just trying to do the same thing better (i.e. operational efficiency )
4. The stock price isn't the goal for a good strategy, it is merely the result. The goal is superior economic performance( i.e. Return on Capital and Growth on a sustained basis)
5. The essence of strategy is what you choose not to do. For example , IKEA. IKEA sells their products without assembling them and this allows them to lower costs which they pass on to customers. Thus IKEA has chosen to forgo "customer service" for lower prices for its customers.
That's all for today. Please like, follow and retweet.
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