Michael Porter - three principles for setting strategy

Michael Porter - three principles for setting strategy

In his paper, 'What is Strategy,' Michael, Porter identified three key principles for setting strategy which I have paraphrased here:1.  Strategy is the creation of a unique and valuable position. Whenever you position your products, you will need them to have a competitive advantage over others, and the greater this competitive advantage, the more valuable will be your strategic position. Maintaining this competitive advantage is at the heart of all strategy.

2.  Strategy is about focus. You cannot expect to sell every product in every market and so you will need to make trade-offs in competing. This is all about focus and of course by definition you cannot focus on many different things. Think of it as a bit like training for the Olympic Games, if you are undecided as to whether to enter the marathon or to enter the weightlifting competition and decide to train both you can guarantee that you will fail in both.

3.  The final principle of setting strategy is to make sure that the future you define for your organisation has a good fit amongst your company's activities. Although you may want to develop existing capabilities or moved to new markets, it would be unrealistic to completely redesign everything you currently do and expect to be successful.


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