In some odd way the reading of “What Is Strategy” by Michael E. Porter reminded me of the program “Ramsey’s kitchen nightmare“, where the celebrity chief Gordon Ramsey visits failing restaurants.
I’ve seen this program a couple of times – is really entertaining – but the first advice he nearly every time gave was that the restaurant needed to shorten their menu to maybe 3-4 main dishes.
And in reading “What Is Strategy” I found out that’s what you call strategy in Business lingo: The capability of saying no or make trade-offs.
The text have several examples of businesses failing in saying no through the 80’s and 90’s.
One of them is when Continental decided to try to comped with Southwest with their cheap-flights Continental Light.
Michael E. Porter writes this as a Failure to Choose:
“Taught by popular management thinkers that they do not have to make trade-offs, managers have acquired a macho sense that to do so is a sign of weakness”.
As I read the text, Michael E. Porter, means there is sources of choosing a strategic position:
– Variety-based positioning: This is based on the choice of product or service varietes rather than customer segments. Example: Jiffy Lube International is specialized only in automotive lubricants. That’s it.
– Needs-based positioning: Targeting of a customer segment. Example: Ikea. They seek to meet all the furnishing needs of its target customers, not just a subset of them. More traditionally way of thinking, Porter writes.
– Acces-based positioning: This is less common than the others. Acces-based positioning is about reaching customers in the best way by example their geography or the scale. Example is Carmike Cinemas. They are specialized in operating movie-theaters in towns with a population under 200,000.