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Competitive Advantages & Operational Effectiveness

By Erica Olsen

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Competitive Advantages & Operational Effectiveness

Michael Porter’s article, How to marry strategy & operational effectiveness, provides the distinction between a company’s strategic mission in contrast to its operational effectiveness. When developing a strategic plan, the author discusses how managers should avoid having a macro view of their industry, but rather focus on the core competencies and critical success factors within their company. This approach will prepare them for a sustained “fit” as their competitive advantage. This fit will identify weaknesses that need attention and cause concern for their competitors. Since the marketplace is always changing, outsourcing can provide for greater efficiencies. Three positioning types are identified: (1) Variety-based, which produce a subset of an industry’s products and services. (2) Needs-based that serve the needs of a particular group, and (3) access-based, which segments customers who are accessible in different ways. Positioning these choices will help determine which activities should be performed, how to configure individual activities, and also how they relate to one another.


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