Michael Porter (1996), in his influential article “What is Strategy”, called cost reduction, quality improvement and customer service operational effectiveness. He argued they are not strategy because, one cannot choose to market products of competitively low quality. One cannot afford to say one will not reduce costs, or will serve customers poorly.
Strategy is about creating value for customers. In this respect operational efficiencies and strategy are alike. But that is where similarities end. Strategy is about making choices. If you take one road you cannot take another. Unlike strategy operational efficiency, or operational effectiveness as Porter called them, is a never-ending demand of the market place. It is complementary to strategy, not an alternative to it.
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