Thread by @AdityaKhanduri

0/ So I have a #strategy quiz tomorrow, and while making notes I thought I will create a #tweetstorm with the major interesting take aways.

I am doing this coz it is also a great way for me to learn (as mentioned by @farnamstreet in this blog: fs.blog/2012/04/learn-…)

1/ A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers (cost advantage) or create comparable value at a lower cost (differentiation), or do both.

2/ Activities are the basic units of competitive advantage.

3/ Operational effectiveness means performing similar activities better and more efficiently than rivals.

Operational effectiveness leads to cost advantage.

4/ Strategic Positioning means performing different activities or performing similar activities in different ways

Strategic Positioning leads to differentiation.

5/ Operational effectiveness is necessary to achieve superior profitability, but not sufficient.

6/ This is coz of (i) rapid diffusion of best practices & (ii) convergence of strategies. As companies imitate & become alike, competition becomes a series of races down identical paths that no one can win. A zero-sum game.

7/ Competitive strategy is about being different in your positioning - deliberately choosing a different set of activities to deliver a unique mix of value

8/ Strategic positions emerge from three distinct sources:
(i) variety-based positioning,
(ii) needs-based positioning &
(ii) access-based positioning

9/ Variety-based positioning: Produce a superior value chain for particular products or services using distinctive sets of activities (best in their niche)

10/ Needs-based positioning: Serve most or all the needs of a particular group of customers.

Won’t translate into meaningful positions unless the best set of activities also differs. or else non-specialised competitor could also meet same needs

11/ Access-based positioning: Perform a different set of activities to reach customers in the best way

Can be a function of customer geography or customer scale, or of anything that requires a different way to reach customers

12/ Strategic positioning is not enough to guarantee a sustained competitive advantage. Unless it has trade-offs with other positions.

Trade-offs create the need for choice and protect against imitators. The essence of strategy is also choosing what not to do.

13/ The strongest competitive advantage comes from how the entire system of activities of a firm fits together to create a strong interlink, which enhances a strategic position's uniqueness and amplifies trade-off

14/ 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 activity

15/ To summarise: What is Strategy?

Strategy is the creation of a unique and valuable position by choosing between trade-offs, involving a different but strongly integrated set of activities.

Finish. I hope you enjoyed :) Maybe I will do more if you like them.