The purpose of this paper is to present a discussion with Joan Magretta about her new book, Understanding Michael Porter: The Essential Guide to Competition and Strategy with two veteran S&L contributing editors.
Based on her long editorial relationship with Porter while she was strategy editor of the Harvard Business Review, she suggests some key lessons about applying his concepts that practitioners should take to heart.
The paper reveals that Magretta believes that too many managers get their Porter second hand and what they usually end up getting is both inadequate and inaccurate. She seeks to rectify the most common misconceptions about strategy and Porter's work.
Some key practical lessons are: keep a direct line of sight between your strategy and your financial performance – if strategy is to have any meaning at all, it must link directly to a company's results; a distinctive value proposition is essential for strategy, but don't confuse strategy with marketing (the demand side); the supply side must be linked; meaningful strategy makes it clear what the organization will not do – making trade‐offs is the linchpin that makes competitive advantage possible and sustainable; do not feel you have to “delight” every possible customer. The sign of a good strategy is that it deliberately makes some customers unhappy.
Magretta, who gained front‐line experience as a consultant at Bain, reviews Porter's groundbreaking strategy work and makes it relevant to today's managers
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