Michael Porter draws a firm distinction between operational effectiveness and a strategy. Briefly describe this distinction and identify when a company can claim that it has a strategy.

Michael Porter draws a firm distinction between operational effectiveness and a strategy. Briefly describe this distinction and identify when a company can claim that it has a strategy.



Answer: Competitors can quickly copy the operationally effective company using benchmarking and other tools, thus diminishing the advantage of operational effectiveness. Porter defines strategy as "the creation of a unique and valuable position involving a different set of activities." A company can claim that it has a strategy when its activities differ from those of its rivals or performs similar activities in different ways.


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