1. What is the difference between emphasizing “best” versus a “need” based business approach when considering organizational strategy?
First off, what is organizational strategy? Chron.com defines organizational strategy as the sum of the actions a company intends to take to achieve their long-term goals (Johnson, 2019, pp. 1). The company needs to define what their current strategy is going to be and then from there plan their organizational strategy on how they are going to get there.
Listening to the video the first thing that stood out was the companies can no longer think that customer loyalty or longevity will keep a company afloat. Michael Porter states that it is no longer going to be that the company’s success or the company’s history that will keep it successful. All companies need a strategy that looks into the future with the company’s vision and mission in mind (Porter, 2015).
When a company uses the “best” approach they are already planning for their demise. Because all companies cannot be the best companies. What companies need to do is find their unique niche in the market. Examples in the video talk about car companies. Each company find what appeals to their customers in their particular market. BMW or Volvo might have the best sales but what sets them apart is what makes them successful (Porter, 2015). The reading materials mention Apple numerous times throughout the lessons, they have found their niche in the market and that is what makes them successful. Even if you don’t like Apple, you know their products. Apple’s niche and uniqueness is that they remain at the top of the advancements of technology and their products reflect that.
2. How can “destructive competition” have a negative impact on strategic development and implementation, and what is the solution? Mr Porter says that in the video, destructive competition is based off of the fact that for one company to be the best another company must fail. But if that’s the case then no company actually wins. If a company eliminate all of their competition, then they also eliminate the need for creativity, improved customer satisfaction, and overall improvements for their products. A company needs to look for how their product provide a uniqueness for the customers. Maybe when you buy a BMW not only is the car an exceptional well engineered machine, but their exceptional customer service might be what sets them apart. Their customer service is that unique thing that appeals to the customers so that they keep coming back.
Johnson, S., (2019, March 8). What is the meaning of organizational strategy? Chron. Retrieved from https://smallbusiness.chron.com/meaning-organizational-strategy-59427.html
Porter, M. (2015, Nov 5). What is strategy? Michael Porter explains common misunderstandings. [Video File]. Retrieved from https://www.youtube.com/watch?v=3Hd88eBgkw0&feature=youtu.be
· Concerning a business approach, organizations must have an approach that is not focused on the competition by implementing an organizational strategy that is unique concerning their business practices as well as offerings to consumers (Porter, 2015). A business approach should not revolve around being the “best” as an organization in competition with others. It should revolve around providing offerings that are unique to consumers that stand apart from other organizations. The difference is found in how the competition is viewed which makes a differentiation. In business, there is no best organization which is why many organizations fail because their approach is to be the best and outshine another organization versus strategically analyzing their external as well as their internal environment to avoid leaders making bad decisions that cause them to lose sight of what is needed as well as unique in value to the consumer (Porter, 2015). When an organizations strategy is “needs” based, they then listen to, understand, as well as facilitate consumer needs efficiently/effectively as the consumer and their loyalty ultimately drives their success versus focusing on their own organizational objectives to seemingly, bypass competitors (Porter, 2015). In other words, an organization that uses tactics such as good customer service, low-cost benefits, which are components of a strategy will only get but so far. To to be wholly effective, organizations must think about all aspects of the business that should work cohesively to achieve their goals in additon to meeting the needs of the consumer. To do this, an organization should know where they stand in their market, ensure their products or services are unique, know whether they are adept at facilitating consumer needs based on their resources and if they are sustainable (Kryscynski, 2015). Competitive advantage begins with a strategy and that strategy should resonate within every sector or role within an organization yielding the fortitude to remain productive, maximize sustainability, and if there is a need, recalibrate and reinvent areas of the organization, ideas, or services that they maintain their uniqueness (Goldsmith, 2013, p. 16).
Destructive competition can have a negative impact on strategic development and implementation in how the competition is viewed and in how business practices are conducted in trying to win over others. A clear vision, mission, and leadership choices play a major role in how a strategy is developed and implemented. For example, if an organization’s business strategy is unique in addition to their offerings having fully assessed their internal and external environment, that organization will be able to operate efficiently and will not need to worry about what another organization is doing per se. In contrast, if an organization, as mentioned, simply wants to be the best in offering something that is not necessarily unique or bases their success on the failure of other organizations, this means that over time, there really is no winner as success is not measured by who stays and who folds, but is measured in being sustainable, unique, and of value (Porter, 2015). An organization’s perspective strategy could be to not interpret other organizations as competition or adversary especially when offering something unique is already a viable solution. Another solution, an organization’s supposed competition viewed under strategic and positive organizational perspectives, could be viewed as a potential ally as one organization can benefit from the other making both even stronger (Saylor, 2014, p. 14-5). This has major potential as many organizations offer products or services that complement one another as opposed to multiple organizations doing the same thing, offering the same thing, forcing other or smaller organizations out of the market which eventually could resemble a monopoly through the exclusion or buying out of other organizations. In any case, organizations truly suffer because of internal management that is misguided or confused about what an appropriate business approach or strategy is or should be, therefore, by bridging the gaps between strategy development and implementation, the vision, and the means of bringing the vision to fruition must build on one another to have influence in the market (Leinwand & Mainardi, 2016). In other words, each variable should receive proper consideration respectively.
Goldsmith, D. (2013, July/Aug). Rethinking the company’s competitive advantage. Financial Executive 29(6), 14-
Kryscynski, D. (2015, January 5). What is Strategy? [Video]. Retrieved from https://www.youtube.com/watch?v=TD7WSLeQtVw
Leinwand, P., & Mainardi, C. (2016, February 3). Creating a strategy that works. Retrieved from https://www.strategy-business.com/feature/Creating-a-Strategy-That-Works
Porter, M. (2015, November 5). What is strategy? Michael Porter explains common misunderstandings [Video]. Retrieved from https://www.youtube.com/watch?v=3Hd88eBgkw0&feature=youtu.be
The Saylor Foundation. (2014). Mastering Strategy: Art and Science. In Mastering Strategic
Management (pp. 14-15).
1. A strategy is necessary, but the approach can vary. Most companies do not have strategies in place and so the work is repetitive or routine with no real emphasis on working toward something, almost like mindless wandering. In some cases, there are certain quotas that need to be met in order to prove position among the best, or most profitable sub-divisions or companies. Instead of focusing on being the “best”, which is a misguided approach, it is more profitable to create an approach aimed at a need that maybe has not been previously met. Michael Porter shares that in business competition, instead of thinking about being the best company, the proper way of thinking is to be a unique company where there can be an advantage over competitors. Having a need based business approach leads toward potentially uncharted territory for advancement, where as a best-based approach leads toward destructive competition.
2. Competition can be viewed from many different lights, but one of the more common ways to understand it is from a perspective of rank or order structure, where one is always better or higher than the other. In sports and other Television shows, there is the goal of finding the best, which means there are also others who fall short or lose. Michael Porter shared that in any competition where your opponent has to fail so that you may win, it is a dangerous competition that is difficult to win. This sort of competition is more common and is unhealthy for the company which is why it is called “destructive competition. The solution to this problem would be to shift the focus away from “being the best” and move toward becoming unique or different. By finding something that other competitors cannot offer, that would create a healthier competition that would lead to more success.