Operational effectiveness is not strategy: Operational effectiveness is the means of performing same or

similar activities better than the competitors/rivals and strategic positioning is to perform activities in a
different manner/way. Example: Japanese companies in 1980s followed operational effectiveness, it
showed lower cost and superior quality among those Japanese companies but question a unique strategic
position of those companies. Those companies could not win much market share because most companies
employed similar processes and methods and had a same cost-base therefore the strategic decision of
those firms was to go outside of Japan where operational effectiveness can be used as a strategic
advantage. Relying only on operational effectiveness as strategy replacement works only as long as
competitors not employing to same process and improvements but as soon those best practices are made
common within the industry, operational effectiveness becomes mutual destructive and counterproductive with imitations and homogeneity as end result
Competitive strategy is about being different.The essence of strategy is choosing to perform activities
differently or to perform different activities than rivals e.g Southwest Airlines offers short haul point to
point ,low cost ,no food,fast turnaround time at the gate of only 15 minutes ,small airports ,automated
ticketing at the gate encourages customers to bypass travel agents and this can save people from paying
commissions to agents.
Strategic position emerge from 3 sources
1-Variety-based positioning;- (Do what you do best)
e.g: Jiffy Lube International specializes in automotive lubricants only.
2. Access- based positioning;- (Do everthing but only for a particular group of customers)
e.g: Ikea furniture meets all the home furnishing needs of its target customers.
3. Access- based positioning;- (Go where your customers are)
Segmenting customers who are accessible in different ways. Access can be customer geography or
customer scale. e.g: Carmike Cinemas operate movie theaters in cities and towns

A sustainable advantage cannot be guaranteed by simply choosing a unique position, as competitors will
imitate a valuable position in one of the two following ways:
1. A competitor can choose to reposition itself to match the superior performer.
2. A competitor can seek to match the benefits of a successful position while maintaining its
existing position.
Trade-offs occurs when activities are incompatible and arise for three reasons:
1. A company known for delivering one kind of value may lack credibility and confuse customers
or undermine its own reputation by delivering another kind of value or attempting to deliver two
inconsistent
things
at
the
same
time.
2. Trade-offs arises from activities themselves. Different positions require different product
configurations, different equipment, different employee behavior, different skills, and different
management systems. In general, value is destroyed if an activity is over designed or under
designed.
3. Trade-offs arises from limits on internal coordination and control. By choosing to compete in
one way and not the other, management is making its organizational priorities clear. In contrast,

companies that tries to be all things to all customers, often risk confusion amongst its employees,
who then attempt to make day-to-day operating decisions without a clear framework.
Tradeoffs create the need for choice and purposely limit points of differentiation. Tradeoffs requires
competitors to abandon one activity for another should they wish to copycat a strategic position, possibly
eroding of the benefits afforded by the original activity. This risk deters competitors from repositioning or
straddling.
Strategy involves creating fit among a companys activities. Fit is when a companys activities reinforce
one another. Fit drives both competitive advantage and sustainability: when activities mutually reinforce
each other, competitors cant easily imitate them. The most valuable fit is strategy specific because it
enhances positions uniqueness and amplifies tradeoffs. Fit is divided into 3 types First order fit is simple
consistency between each activity and the overall strategy. Second order fit occurs when activities are
reinforcing. Third fit goes beyond activity reinforcement to optimization of effort. In all these types the
whole matters more than any individual part. Strategic positioning attempts to achieve sustainable
competitive advantage by preserving what is distinctive about a company. It means performing different
activities from rivals, or performing similar activities in different ways. Strategic fit among many
activities is fundamental not only to competitive advantage but also to the sustainability of that advantage,
it is harder for a rival to match an array of interlocked activities than it is merely to imitate a particular
sales-force approach, match a process technology, or replicate a set of product features. Positions built on
systems of activities are far more sustainable than those built on individual activities. The more a
companys positioning rests on second & third fit the more its sustainable advantage will be.Fit among a
company creates pressures and incentives to improve operational effectiveness. In the absence of fit there
is no distinct strategy and little sustainability.
Rediscovering strategy Unsuccessful strategy is failure to choose a strategic position, the
misinterpretation of competition, mismanagement in the organization, the change in the technology and
less desire of growth. Best practice and operational effectiveness is another option to be successful and
misleading the direction in making a strategic position that is different from others and which will make
for the competitors more difficult to copy or imitate. Growth as policy maker is useful as long as it serves
the strategic position and not weakens the focus. Reaching a broader customer group can change ones
unique position and image. Using M&A strategies to foster growth objectives without adding additional
values for the existing activities will have similar effects thats more weakening. The example of Growth
trap is given: Neutrogena and Maytagas. The managers should be courageous make deliberate decisions
to limit a companys reach and at the same sharpen its focus. Improving operational effectiveness is not
strategy it is just a necessary part of management.