LASA 1: Assignment 2: The Leader as a Strategist Report

 The paper will need to meet the guidelines of the rubric attached. The 2nd attachment is an article that will need to be used in the paper and will need to be one of the referances.

 

Using the Internet, find an organization you would be interested in working for or that is of interest to you personally. You now become a newly appointed senior leader in that organization. As a new leader, you must prepare a report for the CEO that assesses the organization’s overall alignment between its vision, mission, values, and strategy. This report should consist of the following sections:

 

1. An analysis of the strategic cascade of the organization. This includes assessing the organization’s strategy and market position. Use the framework implied in Michael Porter’s (1997) article “What is Strategy.” When describing the business strategy of your organization, consider the following questions:What is the target market (target customer)?What is your organization’s value proposition (How does it deliver value that satisfies the targets wants and needs?)?How is your product or service positioned in the market (What specific features and attributes define the product/service and how is its value reflected in its pricing, distribution, marketing communications, etc.?)?How is your organization sustainably different from your competitors (What is the source of uniqueness and how sustainable is it from being diminished by competitors?)?
2. Your assessment should also include a SWOT analysis (strengths, weaknesses, opportunities, and threats). A SWOT analysis is a strategy planning tool that examines both internal and external environment for factors and trends that should shape planning and operations over the next five years. Environmental factors internal to the company are classified as strengths (to be leveraged) or weaknesses (to be mitigated), while external factors are classified as either opportunities (to be pursued) or threats (to be monitored and responded to).

   Some primer questions for the SWOT analysis include the following: Strengths

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   What advantages does your organization have?What do you do better than anyone else?What unique or lowest-cost resources can you draw upon that others cannot?What do people in your market see as your strengths?What factors mean that you “get the sale”?What is your organization’s unique selling proposition (USP)?

   Weaknesses

   What aspects of your product or service could you improve?What market segments or competitive areas should you avoid?What are people in your market likely to see as weaknesses?What factors can make you lose sales?

   Opportunities

   What good opportunities can you spot?What interesting trends are you aware of?

   Useful opportunities can come from such things as the following:

   Changes in technology and markets on both a broad and narrow scaleChanges in government policy related to your fieldChanges in social patterns, population profiles, lifestyle changes, and so onLocal events

   Threats

   What obstacles do you face?What are your competitors doing?Are quality standards or specifications for your job, products, or services changing?Is changing technology threatening your position?Do you have bad debt or cash-flow problems?Could any of your weaknesses seriously threaten your business?

3. A summary of the internal environment, including the organization’s values and the key elements of the organization architecture that influence worker behavior.

         Include the following characteristics when analyzing the internal environment:

   Structure: This includes the ways the organization assigns formal roles and responsibilities, decision-making authority, expertise and skills, and work tasks. Think of the organization chart and how its implied structure directs the decision making, resource allocation, and workflow of the organization. Is it consistent with the strategy?Systems: This comprises the information flows that coordinate activities between groups and across the organization structure while helping direct worker behavior, including performance management, financial management, operating, forecasting and planning, and other regulating mechanisms. How do these systems help align workers and their actions with the strategy?Culture: This consists of the unwritten rules and norms that govern worker behavior and help coordinate the activities across structural boundaries. Is the organization culture an enabler or impediment to the corporate strategy? What specific behaviors embedded in the culture support the strategy? What specific behaviors block the strategy?

4. A synthesis of the information evaluating the ability of the organization to implement the strategy using Kouzes and Posner’s Five Practices (e.g., modeling the way) as a framework.

 

Include answers to the following:

 

• Company CultureDescribe the values and culture of your organization.What are the values of your organization?How are they reflected in the behaviors you see at work? 

 

• Employee BehaviorsDescribe the behaviors in your organization.Are these behaviors consistent with the business strategy?Where do they conflict with the strategy?What new behaviors are required to align with the strategy?

 

• LeadershipHow might you and other leaders create new behaviors to support the strategy?What specific actions would you implement to communicate, motivate, model the way, coach, inspire the vision, challenge the process, and encourage the heart?       

 

Your response to each part of the assignment should be approximately three pages.

Write a 10–12-page paper in Word format. Apply APA standards to citation of sources.

The Leader as a Strategist Report Rubric

Assignment

Components

Unsatisfactory

< 77%

(C- to C)

Emerging

78 – 82% (C+ to B-)

Proficient

8

3

– 89% (B to B+)

Exemplar

90 – 100 % (A- to A)

Score

To calculate score:

(% / 100) x max

pts.

e.g. (80% /

100) x 12

= 9.6

Assessment of the

organization’s current vision, mission, and strategy to ensure that

the organization

is current, appropriate, actionable, and integrated is present, and it is clear, concise, accurate, and detailed.

/ 36

pts.

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Perspectives in Change Leadership

©2011 Argosy University Online Programs

Analysis of the “strategic cascade” of the organization (includes their strategy and market position) is present, and it is clear, concise, detailed, and accurate and is drawn from the required sources. A complete analysis of the company’s target markets is included. The value proposition is described in terms of meeting important customer wants and needs. The source of competitive differentiation is defined in terms of product features that are tied to specific resources the company controls. SWOT analysis is present, and it is clear, concise, complete, detailed, and logical.

/ 48 pts.

3
The Leader as a Strategist Report Rubric

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Perspectives in Change Leadership
©2011 Argosy University Online Programs

/ 48
pts.

Summary of the internal environment, including the organization’s values and the key elements that influence the worker’s behavior, is present, and it is clear, concise, and accurate and is based on reliable facts. The organization structure is defined in terms of roles and responsibilities, decision-making authority, expertise, and work outputs by describing how these are allocated. The major systems that collect and manage information are identified and their impact on worker behavior is discussed. Organizational values are described as either enabling or blocking behaviors that are necessary to support the strategy.

Synthesis and explanation of the organization’s ability to implement the strategy using Kouzes and Posner’s Five Practices

/ 48 pts.

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Perspectives in Change Leadership
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as a framework including answers to additional required questions is present, and it is clear, concise, accurate, and logical and drawn from valid sources. The organization mission or vision is defined and assessed in terms of how it is used to inspire, motivate, and align worker behaviors. Organizational values are defined and tied to specific behaviors observed in the work place. Mechanisms by which the organization experiments, develops new ideas, and enacts subtle changes to strategy are identified. Mechanisms by which the organization develops teamwork, collaboration, sharing, and problem-solving are identified Mechanisms by which

Page 4 of 5

Perspectives in Change Leadership
©2011 Argosy University Online Programs

the organization recognizes achievement and celebrates the upholding of the values, mission, and goals are identified.
Writing is clear and concise and in an organized manner. It demonstrates ethical scholarship in accurate representation and attribution of sources. It displays accurate spelling, grammar, and punctuation.	/ 20 pts.
Subtotal
Timeliness	Late Work penalty:
Total Score	/200 pts.

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Perspectives in Change Leadership
©2011 Argosy University Online Programs

EBSCO Publishing   Citation Format: APA (American Psychological Assoc.):

NOTE:
Review the instructions at

http://support.ebsco.com/help/?int=ehost&lang=&feature_id=APA

and make any necessary corrections before using. Pay special attention to personal names, capitalization, and dates. Always consult your library resources for the exact formatting and punctuation guidelines.

References

Porter, M. E. (1996). What Is Strategy?. Harvard Business Review, 74(6), 61-78.

What Is Strategy?

I. Operational Effectiveness Is Not Strategy

For almost two decades, managers have been learning to play by a new set of rules. Companies must be flexible to respond rapidly to competitive and market changes. They must benchmark continuously to achieve best practice. They must outsource aggressively to gain efficiencies. And they must nurture a few core competencies in the race to stay ahead of rivals.

Positioning-once the heart of strategy-is rejected as too static for today’s dynamic markets and changing technologies. According to the new dogma, rivals can quickly copy any market position, and competitive advantage is, at best, temporary.

But those beliefs are dangerous half-truths, and they are leading more and more companies down the path of mutually destructive competition. True, some barriers to competition are falling as regulation eases and markets become global. True, companies have properly invested energy in becoming leaner and more nimble. In many industries, however, what some call hypercompetition is a self-inflicted wound, not the inevitable outcome of a changing paradigm of competition.

The root of the problem is the failure to distinguish between operational effectiveness and strategy. The quest for productivity, quality, and speed has spawned a remarkable number of management tools and techniques: total quality management, `benchmarking, time-based competition, outsourcing, partnering, reengineering, change management. Although the resulting operational improvements have often been dramatic, many companies have been frustrated by their inability to translate those gains into sustainable profitability. And bit by bit, almost imperceptibly, management tools have taken the place of strategy. As managers push to improve on all fronts, they move farther away from viable competitive positions.

Operational Effectiveness: Necessary but Not Sufficient

Operational effectiveness and strategy are both essential to superior performance, which, after all, is the primary goal of any enterprise. But they work in very different ways.

A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both. The arithmetic of superior profitability then follows: delivering greater value allows a company to charge higher average unit prices; greater efficiency results in lower average unit costs.

Ultimately, all differences between companies in cost or price derive from the hundreds of activities required to create, produce, sell, and deliver their products or services, such as calling on customers, assembling final products, and training employees. Cost is generated by performing activities, and cost advantage arises from performing particular activities more efficiently than competitors. Similarly, differentiation arises from both the choice of activities and how they are performed. Activities, then, are the basic units of competitive advantage. Overall advantage or disadvantage results from all a company’s activities, not only a few.[1]

Operational effectiveness (OE) means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency. It refers to any number of practices that allow a company to better utilize its inputs by, for example, reducing defects in products or developing better products faster. In contrast, strategic positioning means performing different activities from rivals’ or performing similar activities in different ways.

Differences in operational effectiveness among companies are pervasive. Some companies are able to get more out of their inputs than others because they eliminate wasted effort, employ more advanced technology, motivate employees better, or have greater insight into managing particular activities or sets of activities. Such differences in operational effectiveness are an important source of differences in profitability among competitors because they directly affect relative cost positions and levels of differentiation.

Differences in operational effectiveness were at the heart of the Japanese challenge to Western companies in the 1980s. The Japanese were so far ahead of rivals in operational effectiveness that they could offer lower cost and superior quality at the same time. It is worth dwelling on this point, because so much recent thinking about competition depends on it. Imagine for a moment a productivity frontier that constitutes the sum of all existing best practices at any given time. Think of it as the maximum value that a company delivering a particular product or service can create at a given cost, using the best available technologies, skills, management techniques, and purchased inputs. The productivity frontier can apply to individual activities, to groups of linked activities such as order processing and manufacturing, and to an entire company’s activities. When a company improves its operational effectiveness, it moves toward the frontier. Doing so may require capital investment, different personnel, or simply new ways of managing.

The productivity frontier is constantly shifting outward as new technologies and management approaches are developed and as new inputs become available. Laptop computers, mobile communications, the Internet, and software such as Lotus Notes, for example, have redefined the productivity frontier for sales-force operations and created rich possibilities for linking sales with such activities as order processing and after-sales support. Similarly, lean production, which involves a family of activities, has allowed substantial improvements in manufacturing productivity and asset utilization.

For at least the past decade, managers have been preoccupied with improving operational effectiveness. Through programs such as TQM, time-based competition, and benchmarking, they have changed how they perform activities in order to eliminate inefficiencies, improve customer satisfaction, and achieve, best practice. Hoping to keep up with shifts in the productivity ‘frontier, managers have embraced continuous improvement, empowerment, change management, and the so-called learning organization. The popularity of outsourcing and the virtual corporation reflect the growing recognition that it is difficult to perform all activities as productively as specialists.

As companies move to the frontier, they can often improve on multiple dimensions of performance at the same time. For example, manufacturers that adopted the Japanese practice of rapid changeovers in the 1980s were able to lower cost and improve differentiation simultaneously. What were once believed to be real trade-offs- between defects and costs, for example- turned out to be illusions created by poor operational effectiveness. Managers have learned to reject such false trade-offs.

Constant improvement in operational effectiveness is necessary to achieve superior profitability. However, it is not usually sufficient. Few companies have competed successfully on the basis of operational effectiveness over an extended period, and staying ahead of rivals gets harder every day. The most obvious reason for that is the rapid diffusion of best practices. Competitors can quickly imitate management techniques, new technologies, input improvements, and superior ways of meeting customers’ needs. The most generic solutions- those that can be used in multiple settings- diffuse the fastest. Witness the proliferation of OE techniques accelerated by support from consultants.

OE competition shifts the productivity frontier outward, effectively raising the bar for everyone. But although such competition produces absolute improvement in operational effectiveness, it leads to relative improvement for no one. Consider the $5 billion-plus U.S. commercial-printing industry. The major players- R.R. Donnelley & Sons Company, Quebecor, World Color Press, and Big Flower Press-are competing head to head, serving all types of customers, offering the same array of printing technologies (gravure and web offset), investing heavily in the same new equipment, running their presses faster, and reducing crew sizes. But the resulting major productivity gains are being captured by customers and equipment suppliers, not retained in superior profitability. Even industry-leader Donnelley’s profit margin, consistently higher than 7% in the 1980s, fell to less than 4.6% in 1995. This pattern is playing itself out in industry after industry. Even the Japanese, pioneers of the new competition, suffer from persistently low profits. (See the insert “Japanese Companies Rarely Have Strategies.”)

The second reason that improved operational effectiveness is insufficient- competitive convergence- is more subtle and insidious. The more benchmarking companies do, the more they look alike. The more that rivals outsource activities to efficient third parties, often the same ones, the more generic those activities become. As rivals imitate one another’s improvements in quality, cycle times, or supplier partnerships, strategies converge and competition becomes a series of races down identical paths that no one can win. Competition based on operational effectiveness alone is mutually destructive, leading to wars of attrition that can be arrested only by limiting competition.

The recent wave of industry consolidation through mergers makes sense in the context of OE competition. Driven by performance pressures but lacking strategic vision, company after company has had no better idea than to buy up its rivals. The competitors left standing are often those that outlasted others, not companies with real advantage.

After a decade of impressive gains in operational effectiveness, many companies are facing diminishing returns. Continuous improvement has been etched on managers’ brains. But its tools unwittingly draw companies toward imitation and homogeneity. Gradually, managers have let operational effectiveness supplant strategy. The result is zero-sum competition, static or declining prices, and pressures on costs that compromise companies’ ability to invest in the business for the long term.

II. Strategy Rests on Unique Activities

Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.

Southwest Airlines Company, for example, offers short-haul, low-cost, point-to-point service between midsize cities and secondary airports in large cities. Southwest avoids large airports and does not fly great distances. Its customers include business travelers, families, and students. Southwest’s frequent departures and low fares attract price-sensitive customers who otherwise would travel by bus or car, and convenience-oriented travelers who would choose a full-service airline on other routes.

Most managers describe strategic positioning in terms of their customers: “Southwest Airlines serves price- and convenience-sensitive travelers,” for example. But the essence of strategy is in the activities-choosing to perform activities differently or to perform different activities than rivals. Otherwise, a strategy is nothing more than a marketing slogan that will not withstand competition.

A full-service airline is configured to get passengers from almost any point A to any point B. To reach a large number of destinations and serve passengers with connecting flights, full-service airlines employ a hub-and-spoke system centered on major airports. To attract passengers who desire more comfort, they offer first-class or business-class service. To accommodate passengers who must change planes, they coordinate schedules and check and transfer baggage. Because some passengers will be traveling for many hours, full-service airlines serve meals.

Southwest, in contrast, tailors all its activities to deliver low-cost, convenient service on its particular type of route. Through fast turnarounds at the gate of only 15 minutes, Southwest is able to keep planes flying longer hours than rivals and provide frequent departures with fewer aircraft. Southwest does not offer meals, assigned seats, interline baggage checking, or premium classes of service. Automated ticketing at the gate encourages customers to bypass travel agents, allowing Southwest to avoid their commissions. A standardized fleet of 737 aircraft boosts the efficiency of maintenance.

Southwest has staked out a unique and valuable strategic position based on a tailored set of activities. On the routes served by Southwest, a full-service airline could never be as convenient or as low cost.

Ikea, the global furniture retailer based in Sweden, also has a clear strategic positioning. Ikea targets young furniture buyers who want style at low cost. What turns this marketing concept into a strategic positioning is the tailored set of activities that make it work. Like Southwest, Ikea has chosen to perform activities differently from its rivals.

Consider the typical furniture store. Showrooms display samples of the merchandise. One area might contain 25 sofas; another will display five dining tables. But those items represent only a fraction of the choices available to customers. Dozens of books displaying fabric swatches or wood samples or alternate styles offer customers thousands of product varieties to choose from. Salespeople often escort customers through the store, answering questions and helping them navigate this maze of choices. Once a customer makes a selection, the order is relayed to a third-party manufacturer. With luck, the furniture will be delivered to the customer’s home within six to eight weeks. This is a value chain that maximizes customization and service but does’ so at high cost.

In contrast, Ikea serves customers who are happy to trade off service for cost. Instead of having a sales associate trail customers around the store, Ikea uses a self-service model based on clear, in-store displays. Rather than rely solely on third-party manufacturers, Ikea designs its own low-cost, modular, ready-to-assemble furniture to fit its positioning. In huge stores, Ikea displays every product it sells in room-like settings, so customers don’t need a decorator to help them imagine how to put the pieces together. Adjacent to the furnished showrooms is a warehouse section with the products in boxes on pallets. Customers are expected to do their own pickup and delivery, and Ikea will even sell you a roof rack for your car that you can return for a refund on your next visit.

Although much of its low-cost position comes from having customers “do it themselves,” Ikea offers a number of extra services that its competitors do not. In-store child care is one. Extended hours are another. Those services are uniquely aligned with the needs of its customers, who are young, not wealthy, likely to have children (but no nanny), and, because they work for a living, have a need to shop at odd hours.

The Origins Strategic Positions

Strategic positions emerge from three distinct sources, which are not mutually exclusive and often overlap. First, positioning can be based on producing a subset of an industry’s products or services. I call this variety-based positioning because it is based on the choice of product or service varieties rather than customer segments. Variety-based positioning makes economic sense when a company. can best produce particular products or services using distinctive sets of activities.

Jiffy Lube International, for instance, specializes in automotive lubricants and does not offer other car repair or maintenance services. Its value chain produces faster service at a lower cost than broader line repair shops, a combination so attractive that many customers subdivide their purchases, buying oil changes from the focused competitor, Jiffy Lube, and going to rivals for other services.

The Vanguard Group, a leader in the mutual fund industry, is another example of variety-based positioning. Vanguard provides an array of common stock, bond, and money market funds that offer predictable performance and rock-bottom expenses. The company’s investment approach deliberately sacrifices the possibility of extraordinary performance in any one year for good relative performance in every year. Vanguard is known, for example, for its index funds. It avoids making bets on interest rates and steers clear of narrow stock groups. Fund managers keep trading levels low, which holds expenses down; in addition, the company discourages customers from rapid buying and selling because doing so drives up costs and can force a fund manager to trade in order to deploy new capital and raise cash for redemptions. Vanguard also takes a consistent low-cost approach to managing distribution, customer service, and marketing. Many investors include one or more Vanguard funds in their portfolio, while buying aggressively managed or specialized funds from competitors.

The people who use Vanguard or Jiffy Lube are responding to a superior value chain for a particular type of service. A variety-based positioning can serve a wide array of customers, but for most it will meet only a subset of their needs.

A second basis for positioning is that of serving most or all the needs of a particular group of customers. I call this needs-based positioning, which comes closer to traditional thinking about targeting a segment of customers. It arises when there are groups of customers with differing needs, and when a tailored set of activities can serve those needs best. Some groups of customers are more price sensitive than others, demand different product features, and need varying amounts of information, support, and services. Ikea’s customers are a good example of such a group. Ikea seeks to meet all the home furnishing needs of its target customers, not just a subset of them.

A variant of needs-based positioning arises when the same customer has different needs on different occasions or for different types of transactions. The same person, for example, may have different needs when traveling on business than when traveling for pleasure with the family. Buyers of cans – beverage companies, for example – will likely have different needs from their primary supplier than from their secondary source.

It is intuitive for most managers to conceive of their business in terms of the customers’ needs they are meeting.. But a critical element of needs-based positioning is not at all intuitive and is often overlooked. Differences in needs will not translate into meaningful positions unless the best set of activities to satisfy them also differs. If that were not the case, every competitor could meet those same needs, and there would be nothing unique or valuable about the positioning.

In private banking, for example, Bessemer Trust Company targets families with a minimum of $5 million in investable assets who want capital preservation combined with wealth accumulation. By assigning one sophisticated account officer for every 14 families, Bessemer has configured its activities for personalized service. Meetings, for example, are more likely to be held at a client’s ranch or yacht than in the office. Bessemer offers a wide array of customized services, including investment management and estate administration, oversight of oil and gas investments, and accounting for racehorses and aircraft. Loans, a staple of most private banks, are rarely needed by Bessemer’s clients and make up a tiny fraction of its client balances and income. Despite the most generous compensation of account officers and the highest personnel cost as a percentage of operating expenses, Bessemer’s differentiation with its target families produces a return on equity estimated to be the highest of any private banking competitor.

Citibank’s private bank, on the other hand, serves clients with minimum assets of about $250,000 who, in contrast to Bessemer’s clients, want convenient access to loans-from jumbo mortgages to deal financing. Citibank’s account managers are primarily lenders. When clients need other services, their account manager refers them to other Citibank specialists, each of whom handles prepackaged products. Citibank’s system is less customized than Bessemer’s and allows it to have a lower manager-to-client ratio of 1:125. Biannual office meetings are offered only for the largest clients. Both Bessemer and Citibank have tailored their activities to meet the needs of a different group of private banking customers. The same value chain cannot profitably meet the needs of both groups.

The third basis for positioning is that of segmenting customers who are accessible in different ways. Although their needs are similar to those of other customers, the best configuration of activities to reach them is different. I call this access-based positioning. Access can be a function of customer geography or customer scale-or of anything that requires a different set of activities to reach customers in the best way.

Segmenting by access is less common and less well understood than the other two bases. Carmike Cinemas, for example, operates movie theaters exclusively in cities and towns with populations under 200,000. How does Carmike make money in markets that are not only small but also won’t support big-city ticket prices? It does so through a set of activities that result in a lean cost structure. Carmike’s small-town customers can be served through standardized, low-cost theater complexes requiring fewer screens and less sophisticated projection technology than big-city theaters. The company’s proprietary information system and management process eliminate the need for local administrative staff beyond a single theater manager. Carmike also reaps advantages from centralized purchasing, lower rent and payroll costs (because of its locations), and rock-bottom corporate overhead of 2% (the industry average is 5%). Operating in small communities also allows Carmike to practice a highly personal form of marketing in which the theater manager knows patrons and promotes attendance through personal contacts. By being the dominant if not the only theater in its markets-the main competition is often the high school football team-Carmike is also able to get its pick of films and negotiate better terms with distributors.

Rural versus urban-based customers are one example of access driving differences in activities. ‘Serving small rather than large customers or densely rather than sparsely situated customers are other examples in which the best way to configure marketing, order processing, logistics, and after-sale service activities to meet the similar needs of distinct groups will often differ.

Positioning is not only about carving out a niche. A position emerging from any of the sources can be broad or narrow. A focused competitor, such as Ikea, targets the special needs of a subset of customers and designs its activities accordingly. Focused competitors thrive on groups of customers who are overserved (and hence overpriced) by more broadly targeted competitors, or underserved (and hence underpriced). A broadly targeted competitor – for example, Vanguard or Delta Air Lines – serves a wide array of customers, performing a set of activities designed to meet their common needs. It ignores or meets only partially the more idiosyncratic needs of particular customer groups.

Whatever the basis- variety, needs, access, or some combination of the three- positioning requires a tailored set of activities because it is always a function of differences on the supply side; that is, of differences in activities. However, positioning is not always a function of differences on the demand, or customer, side. Variety and access positionings, in particular, do not rely on any customer differences. In practice, however, variety or access differences often accompany needs differences. The tastes-that is, the needs-of Carmike’s small-town customers, for instance, run more toward comedies, Westerns, action films, and family entertainment. Carmike does not run any films rated NC- 17.

Having defined positioning, we can now begin to answer the question, “What is strategy?” Strategy is the creation of a unique and valuable position, involving a different set of activities. If there were only one ideal position, there would be no need for strategy. Companies would face a simple imperative-win the race to discover and preempt it. The essence of strategic positioning is to choose activities that are different from rivals’. If the same set of activities were best to produce all varieties, meet all needs, and access all customers, companies could easily shift among them and operational effectiveness would determine performance.

III. A Sustainable Strategic Position Requires Trade-offs

Choosing a unique position, however, is not enough to guarantee a sustainable advantage. A valuable position will attract imitation by incumbents, who are likely to copy it in one of two ways.

First, a competitor can reposition itself to match the superior performer. J.C. Penney, for instance, has been repositioning itself from a Sears clone to a more upscale, fashion-oriented, soft-goods retailer. A second and far more common type of imitation is straddling. The straddler seeks to match the benefits of a successful position while maintaining its existing position. It grafts new features, services, or technologies onto the activities it already performs.

For those who argue that competitors can copy any market position, the airline industry is a perfect test case. It would seem that nearly any competitor could imitate any other airline’s activities. Any airline can buy the same planes, lease the gates, and match the menus and ticketing and baggage handling services offered by other airlines.

Continental Airlines saw how well Southwest was doing and decided to straddle. While maintaining its position as a full-service airline, Continental also set out to match Southwest on a number of point-to-point routes. The airline dubbed the new service Continental Lite. It eliminated meals and first-class service, increased departure frequency, lowered fares, and shortened turnaround time at the gate. Because Continental remained a full-service airline on other routes, it continued to use travel agents and its mixed fleet of planes and to provide baggage checking and seat assignments.

But a strategic position is not sustainable unless there are trade-offs with other positions. Trade-offs occur when activities are incompatible. Simply put, a trade-off means that more of one thing necessitates less of another. An airline can choose to serve meals- adding cost and slowing turnaround time at the gate-or it can choose not to, but it cannot do both without bearing major inefficiencies.

Trade-offs create the need for choice and protect against repositioners and straddlers. Consider Neutrogena soap. Neutrogena Corporation’s Variety-based positioning is built on a “kind to the skin,” residue-free soap formulated for pH balance. With a large detail force calling on dermatologists, Neutrogena’s marketing strategy looks more like a drug company’s than a soap maker’s. It advertises in medical journals, sends direct mail to doctors, attends medical conferences, and performs research at its own Skincare Institute. To reinforce its positioning, Neutrogena originally focused its distribution on drugstores and avoided price promotions. Neutrogena uses a slow, more expensive manufacturing process to mold its fragile soap.

In choosing this position, Neutrogena said no to the deodorants and skin softeners that many customers desire in their soap. It gave up the large-volume potential of selling through supermarkets and using price promotions. It sacrificed manufacturing efficiencies to achieve the soap’s desired attributes. In its original positioning, Neutrogena made a whole raft of trade-offs like those, trade-offs that protected the company from imitators.

Trade-offs arise for three reasons. The first is inconsistencies in image or reputation. A company known for delivering one kind of value may lack credibility and confuse customers- or even undermine its reputation- if it delivers another kind of value or attempts to deliver two inconsistent things at the same time. For example, Ivory soap, with its position as a basic, inexpensive everyday soap would have a hard time reshaping its image to match Neutrogena’s premium “medical” reputation. Efforts to create a new image typically cost tens or even hundreds of millions of dollars in a major industry-a powerful barrier to imitation.

Second, and more important, trade-offs arise from activities themselves. Different positions (with their tailored activities) require different product configurations, different equipment, different employee behavior, different skills, and different management systems. Many trade-offs reflect inflexibilities in machinery, people, or systems. The more Ikea has configured its activities to lower costs by having its customers do their own assembly and delivery, the less able it is to satisfy customers who require higher levels of service.

However, trade-offs can be even more basic. In general, value is destroyed if an activity is overdesigned or underdesigned for its use. For example, even if a given salesperson were capable of providing a high level of assistance to one customer and none to another, the salesperson’s talent (and some of his or her cost) would be wasted on the second customer. Moreover, productivity can improve when variation of an activity is limited. By providing a high level of assistance all the time, the salesperson and the entire sales activity can often achieve efficiencies of learning and scale.

Finally, trade-offs arise from limits on internal coordination and control. By clearly choosing to compete in one way and not another, senior management makes organizational priorities clear. Companies that try to be all things to all customers, in contrast, risk confusion in the trenches as employees attempt to make day-to-day operating decisions without a clear framework.

Positioning trade-offs are pervasive in competition and essential to strategy. They create the need for choice and purposefully limit what a company offers. They deter straddling or repositioning, because competitors that engage in those approaches undermine their strategies and degrade the value of their existing activities.

Trade-offs ultimately grounded Continental Lite. The airline lost hundreds of millions of dollars, and the CEO lost his job. Its planes were delayed leaving congested hub cities or slowed at the gate by baggage transfers. Late flights and cancellations generated a thousand complaints a day. Continental Lite could not afford to compete on price and still pay standard travel-agent commissions, but neither could it do without agents for its full-service business. The airline compromised by cutting commissions for all Continental flights across the board. Similarly, it could not afford to offer the same frequent-flier benefits to travelers paying the much lower ticket prices for Lite service. It compromised again by lowering the rewards of Continental’s entire frequent-flier program. The results: angry travel agents and full-service customers.

Continental tried to compete in two ways at once. In trying to be low cost on some routes and full service on others, Continental paid an enormous straddling penalty. If there were no trade-offs between the two positions, Continental could have succeeded. But the absence of trade-offs is a dangerous half-truth that managers must unlearn. Quality is not always free. Southwest’s convenience, one kind of high quality, happens to be consistent with low costs because its frequent departures are facilitated by a number of low-cost practices- fast gate turnarounds and automated ticketing, for example. However, other dimensions of airline quality- an assigned seat, a meal, or baggage transfer-require costs to provide.

In general, false trade-offs between cost and quality occur primarily when there is redundant or wasted effort, poor control or accuracy, or weak coordination. Simultaneous improvement of cost and differentiation is possible only when a company begins far behind the productivity frontier or when the frontier shifts outward. At the frontier, where companies have achieved current best practice, the trade-off between cost and differentiation is very real indeed.

After a decade of enjoying productivity advantages, Honda Motor Company and Toyota Motor Corporation recently bumped up against the frontier. In 1995, faced with increasing customer resistance to higher automobile prices, Honda found that the only way to produce a less-expensive car was to skimp on features. In the United States, it replaced the rear disk brakes on the Civic with lower-cost drum brakes and used cheaper fabric for the back seat, hoping customers would not notice. Toyota tried to sell a version of its best-selling Corolla in Japan with unpainted bumpers and cheaper seats. In Toyota’s case, customers rebelled, and the company quickly dropped the new model.

For the past decade, as managers have improved operational effectiveness greatly, they have internalized the idea that eliminating trade-offs is a good thing. But if there are no trade-offs companies will never achieve a sustainable advantage. They will have to run faster and faster just to stay in place.

As we return to the question, What is strategy? we see that trade-offs add a new dimension to the answer. Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do. Without trade-offs, there would be no need for choice and thus no need for strategy. Any good idea could and would be quickly imitated. Again, performance would once again depend wholly on operational effectiveness.

IV. Fit Drives Both Competitive Advantage and Sustainability

Positioning choices determine not only which activities a company will perform and how it will configure individual activities but also how activities relate to one another. While operational effectiveness is about achieving excellence in individual activities, or functions, strategy is about combining activities.

Southwest’s rapid gate turnaround, which allows frequent departures and greater use of aircraft, is essential to its high-convenience, low-cost positioning. But how does Southwest achieve it? Part of the answer lies in the company’s well-paid gate and ground crews, whose productivity in turnarounds is enhanced by flexible union rules. But the bigger part of the answer lies in how Southwest performs other activities. With no meals, no seat assignment, and no interline baggage transfers, Southwest avoids having to perform activities that slow down other airlines. It selects airports and routes to avoid congestion that introduces delays. Southwest’s strict limits on the type and length of routes make standardized aircraft possible: every aircraft Southwest turns is a Boeing 737.

What is Southwest’s core competence? Its key success factors? The correct answer is that everything matters. Southwest’s strategy involves a whole system of activities, not a collection of parts. Its competitive advantage comes from the way its activities fit and reinforce one another.

Fit locks out imitators by creating a chain that is as strong as its strongest link. As in most companies with good strategies, Southwest’s activities complement one another in ways that create real economic value. One activity’s cost, for example, is lowered because of the way other activities are performed. Similarly, one activity’s value to customers can be enhanced by a company’s other activities. That is the way strategic fit creates competitive advantage and superior profitability.

Types of Fit

The importance of fit among functional policies is one of the oldest ideas in strategy. Gradually, however, it has been supplanted on the management agenda. Rather than seeing the company as a whole, managers have turned to “core” competencies, “critical” resources, and “key” success factors. In fact, fit is a far more central component of competitive advantage than most realize.

Fit is important because discrete activities often affect one another. A sophisticated sales force, for example, confers a greater advantage when the company’s product embodies premium technology and its marketing approach emphasizes customer assistance and support. A production line with high levels of model variety is more valuable when combined with an inventory and order processing system that minimizes the need for stocking finished goods, a sales process equipped to explain and encourage customization, and an advertising theme that stresses the benefits of product variations that meet a customer’s special needs. Such complementarities are pervasive in strategy. Although some fit among activities is generic and applies to many companies, the most valuable fit is strategy-specific because it enhances a position’s uniqueness and amplifies trade-offs.[2]

There are three types of fit, although they are not mutually exclusive. First-order fit is simple consistency between each activity (function) and the overall strategy. Vanguard, for example, aligns all activities with its low-cost strategy. It minimizes portfolio turnover and does not need highly compensated money managers. The company distributes its funds directly, avoiding commissions to brokers. It also limits advertising, relying instead on public relations and word-of-mouth recommendations. Vanguard ties its employees’ bonuses to cost savings.

Consistency ensures that the competitive advantages of activities cumulate and do not erode or cancel themselves out. It makes the strategy easier to communicate to customers, employees, and shareholders, and improves implementation through single-mindedness in the corporation.

Second-order fit occurs when activities are reinforcing. Neutrogena, for example, markets to upscale hotels eager to offer their guests a soap recommended by dermatologists. Hotels grant Neutrogena the privilege of using its customary packaging while requiring other soaps to feature the hotel’s name. Once guests have tried Neutrogena in a luxury hotel, they are more likely to purchase it at the drugstore or ask their doctor about it. Thus Neutrogena’s medical and hotel marketing activities reinforce one another, lowering total marketing costs.

In another example, Bic Corporation sells a narrow line of standard, low-priced pens to virtually all major customer markets (retail, commercial, promotional, and giveaway) through virtually all available channels. As with any variety-based positioning serving a broad group of customers, Bic emphasizes a common need (low price for an acceptable pen) and uses marketing approaches with a broad reach (a large sales force and heavy television advertising). Bic gains the benefits of consistency across nearly all activities, including product design that emphasizes ease of manufacturing, plants configured for low cost, aggressive purchasing to minimize material costs, and in-house parts production whenever the economics dictate.

Yet Bic goes beyond simple consistency because its activities are reinforcing. For example, the company uses point-of-sale displays and frequent packaging changes to stimulate impulse buying. To handle point-of-sale tasks, a company needs a large sales force. Bic’s is the largest in its industry, and it handles point-of-sale activities better than its rivals do. Moreover, the combination of point-of-sale activity, heavy television advertising, and packaging changes yields far more impulse buying than any activity in isolation could.

Third-order fit goes beyond activity reinforcement to what I call optimization of effort. The Gap, a retailer of casual clothes, considers product availability in its stores a critical element of its strategy. The Gap could keep products either by holding store inventory or by restocking from warehouses. The Gap has optimized its effort across these activities by restocking its selection of basic clothing almost daily out of three warehouses, thereby minimizing the need to carry large in-store inventories. The emphasis is on restocking because the Gap’s merchandising strategy sticks to basic items in relatively few colors. While comparable retailers achieve turns of three to four times per year, the Gap turns its inventory seven and a half times per year. Rapid restocking, moreover, reduces the cost of implementing the Gap’s short model cycle, which is six to eight weeks long.[3]

Coordination and information exchange across activities to eliminate redundancy and minimize wasted effort are the most basic types of effort optimization. But there are higher levels as well. Product design choices, for example, can eliminate the need for after-sale service or make it possible for customers to perform service activities themselves. Similarly, coordination with suppliers or distribution channels can eliminate the need for some in-house activities, such as end-user training.

In all three types of fit, the whole matters more than any individual part.. Competitive advantage grows out of the entire system of activities. The fit among activities substantially reduces cost or. increases differentiation. Beyond that, the competitive value of individual activities-or the associated skills, competencies, or resources- cannot be decoupled from the system or the strategy. Thus in competitive companies it can be misleading to explain success by specifying individual strengths, core competencies, or critical resources. The list of strengths cuts across many functions, and one strength blends into others. It is more useful to think in terms of themes that pervade many activities, such as low cost, a particular notion of customer service, or a particular conception of the value delivered. These themes are embodied in nests of tightly linked activities.

Fit and Sustainability

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 sales-force approach, match a process technology, or replicate a set of product features. Positions built on systems of activities are far more sustainable than those built on individual activities.

Consider this simple exercise. The probability that competitors can match any activity is often less than one. The probabilities then quickly compound to make matching the entire system highly unlikely (.9x.9= .81; .9x.9x.9x.9= .66, and so on). Existing companies that try to reposition or straddle will be forced to reconfigure many activities. And even new entrants, though they do not confront the trade-offs facing established rivals, still face formidable barriers to imitation.

The more a company’s positioning rests on activity systems with second- and third-order fit, the more sustainable its advantage will be. Such systems, by their very nature, are usually difficult to untangle from outside the company and therefore hard to imitate. And even if rivals can identify the relevant interconnections, they will have difficulty replicating them. Achieving fit is difficult because it requires the integration of decisions, and actions across many independent subunits.

A competitor seeking to match an activity system gains little by imitating only some activities and not matching the whole. Performance does not improve; it can decline. Recall Continental Lite’s disastrous attempt to imitate Southwest.

Finally, fit among a company’s activities creates pressures and incentives to improve operational effectiveness, which makes imitation even harder. Fit means that poor performance in one activity will degrade the performance in others, so that weaknesses are exposed and more prone to get attention. Conversely, improvements in one activity will pay dividends in others. Companies with strong fit among their activities are rarely inviting targets. Their superiority in strategy and in execution only compounds their advantages and raises the hurdle for imitators.

When activities complement one another, rivals will get little benefit from imitation unless they successfully match the whole system. Such situations tend to promote winner-take-all competition. The company that builds the best activity system – Toys R Us, for instance – wins, while rivals with similar strategies- Child World and Lionel Leisure-fall behind. Thus finding a new strategic position is often preferable to being the second or third imitator of an occupied position.

The most viable positions are those whose activity systems are incompatible because of tradeoffs. Strategic positioning sets the trade-off rules that define how individual activities will be configured and integrated. Seeing strategy in terms of activity systems only makes it clearer why organizational structure, systems, and processes need to be strategy-specific. Tailoring organization to strategy, in turn, makes complementarities more achievable and contributes to sustainability.

One implication is that strategic positions should have a horizon of a decade or more, not of a single planning cycle. Continuity fosters improvements in individual activities and the fit across activities, allowing an organization to build unique capabilities and skills tailored to its strategy. Continuity also reinforces a company’s identity.

Conversely, frequent shifts in positioning are costly. Not only must a company reconfigure individual activities, but it must also realign entire systems. Some activities may never catch up to the vacillating strategy. The inevitable result of frequent shifts in strategy, or of failure to choose a distinct position in the first place, is “me-too” or hedged activity configurations, inconsistencies across functions, and organizational dissonance.

What is strategy? We can now complete the answer to this question. Strategy is creating fit among a company’s activities. The success of a strategy depends on doing many things well – not just a few – and integrating among them. If there is no fit among activities, there is no distinctive strategy and little sustainability. Management reverts to the simpler task of overseeing independent functions, and operational effectiveness determines an organization’s relative performance.

V. Rediscovering Strategy

The Failure to Choose

Why do so many companies fail to have a strategy? Why do managers avoid making strategic choices? Or, having made them in the past, why do managers so often let strategies decay and blur?

Commonly, the threats to strategy are seen to emanate from outside a company because of changes in technology or the behavior of competitors. Although external changes can be the problem, the greater threat to strategy often comes from within. A sound strategy is undermined by a misguided view of competition, by organizational failures, and, especially, by the desire to grow.

Managers have become confused about the necessity of making choices. When many companies operate far from the productivity frontier, trade-offs appear unnecessary. It can seem that a well-run company should be able to beat its ineffective rivals on all dimensions simultaneously. Taught by popular management thinkers that they do not have to make trade-offs, managers have acquired a macho sense that to do so is a sign of weakness.

Unnerved by forecasts of hypercompetition, managers increase its likelihood by imitating everything about their competitors. Exhorted to think in terms of revolution, managers chase every new technology for its own sake.

The pursuit of operational effectiveness is seductive because it is concrete and actionable. Over the past decade, managers have been under increasing pressure to deliver tangible, measurable performance improvements. Programs in operational effectiveness produce reassuring progress, although superior profitability may remain elusive. Business publications and consultants flood the market with information about what other companies are doing, reinforcing the best-practice mentality. Caught up in the race for operational effectiveness, many managers simply do not understand the need to have a strategy.

Companies avoid or blur strategic choices for other reasons as well. Conventional wisdom within an industry is often strong, homogenizing competition. Some managers mistake “customer focus” to mean they must serve all customer needs or respond to every request from distribution channels. Others cite the desire to preserve flexibility.

Organizational realities also work against strategy. Trade-offs are frightening, and making no choice is sometimes preferred to risking blame for a bad choice. Companies imitate one another in a type of herd behavior, each assuming rivals know something, they do not. Newly empowered employees, who are urged to seek every possible source of improvement, often lack a vision of the whole and the perspective to recognize trade-offs. The failure to choose sometimes comes down to the reluctance to disappoint valued managers or employees.

The Growth Trap

Among all other influences, the desire to grow has perhaps the most perverse effect on strategy. Trade-offs and limits appear to constrain growth. Serving one group of customers and excluding others, for instance, places a real or imagined limit on revenue growth. Broadly targeted strategies emphasizing low price result in lost sales with customers sensitive to features or service. Differentiators lose sales to price-sensitive customers.

Managers are constantly tempted to take incremental steps that surpass those limits but blur a company’s strategic position. Eventually, pressures to grow or apparent saturation of the target market lead managers to broaden the position by extending product lines, adding new features, imitating competitors’ popular services, matching processes, and even making acquisitions. For years, Maytag Corporation’s success was based on its focus on reliable, durable washers and dryers, later extended to include dishwashers. However, conventional wisdom emerging within the industry supported the notion of selling a full line of products. Concerned with slow industry growth and competition from broad-line appliance makers, Maytag was pressured by dealers and encouraged by customers to extend its line. Maytag expanded into refrigerators and cooking products under the Maytag brand and acquired other brands – Jenn-Air, Hardwick Stove, Hoover, Admiral, and Magic Chef-with disparate positions. Maytag has grown substantially from $684 million in 1985 to a peak of $3.4 billion in 1994, but return on sales has declined from 8% to 12% in the 1970s and 1980s to an average of less than 1% between 1989 and 1995. Cost cutting will improve this performance, but laundry and dishwasher products still anchor Maytag’s profitability.

Neutrogena may have fallen into the same trap. In the early 1990s, its U.S. distribution broadened to include mass merchandisers such as Wal-Mart Stores. Under the Neutrogena name, the company expanded into a wide variety of products- eye-makeup remover and shampoo, for example- in which it was not unique and which diluted its image, and it began turning to price promotions.

Compromises and inconsistencies in the pursuit of growth will erode the competitive advantage a company had with its original varieties or target customers. Attempts to compete in several ways at once create confusion and undermine organizational motivation and focus. Profits fall, but more revenue is seen as the answer. Managers are unable to make choices, so the company embarks on a new round of broadening and compromises. Often, rivals continue to match each other until desperation breaks the cycle, resulting in a merger or downsizing to the original positioning.

Profitable Growth

Many companies, after a decade of restructuring and cost-cutting, are turning their attention to growth. Too often, efforts to grow blur uniqueness, create compromises, reduce fit, and ultimately undermine competitive advantage. In fact, the growth imperative is hazardous to strategy.

What approaches to growth preserve and reinforce strategy? Broadly, the prescription is to concentrate on deepening a strategic position rather than broadening and compromising it. One approach is to look for extensions of the strategy that leverage the existing activity system by offering features or services that rivals would find impossible or costly to match on a stand-alone basis. In other words, managers can ask themselves which activities, features, or forms of competition are feasible or less costly to them because of complementary activities that their company performs.

Deepening a position involves making the company’s activities more distinctive, strengthening fit, and communicating the strategy better to those customers who should value it. But many companies succumb to the temptation to chase “easy” growth by adding hot features, products, or services without screening them or adapting them to their strategy. Or they target new customers or markets in which the company has little special to offer. A company can often grow faster-and far more profitably- by better penetrating needs and varieties where it is distinctive than by slugging it out in potentially higher growth arenas in which the company lacks uniqueness. Carmike, now the largest theater chain in the United States, owes its rapid growth to its disciplined concentration on small markets. The company quickly sells any big-city theaters that come to it as part of an acquisition.

Globalization often allows growth that is consistent with strategy, opening up larger markets for a focused strategy. Unlike broadening domestically, expanding globally is likely to leverage and reinforce a company’s unique position and identity.

Companies seeking growth through broadening within their industry can best contain the risks to strategy by creating stand-alone units, each with its own brand name and tailored activities. Maytag has clearly struggled with this issue. On the one hand, it has organized its premium and value brands into separate units with different strategic positions. On the other, it has created an umbrella appliance company for all its brands to gain critical mass. With shared design, manufacturing, distribution, and customer service, it will be hard to avoid homogenization. If a given business unit attempts to compete with different positions for different products or customers, avoiding compromise is nearly impossible.

The Role of Leadership

The challenge of developing or reestablishing a clear strategy is often primarily an organizational one and depends on leadership. With so many forces at work against making choices and tradeoffs in organizations, a clear intellectual framework to guide strategy is a necessary counterweight. Moreover, strong leaders willing to make choices are essential.

In many companies, leadership has degenerated into orchestrating operational improvements and making deals. But the leader’s role is broader and far more important: General management is more than the stewardship of individual functions. Its core is strategy: defining and communicating the company’s unique position, making trade-offs, and forging fit among activities. The leader must provide the discipline to decide which industry changes and customer needs the company will respond to, while avoiding organizational distractions and maintaining the company’s distinctiveness. Managers at lower levels lack the perspective and the confidence to maintain a strategy. There will be constant pressures to compromise, relax trade-offs, and emulate rivals. One of the leader’s jobs is to teach others in the organization about strategy-and to say no.

Strategy renders choices about what not to do as important as choices about what to do. Indeed, setting limits is another function of leadership. Deciding which target group of customers, varieties, and needs the company should serve is fundamental to developing a strategy. But so is deciding not to serve other customers or needs and not to offer certain features or services. Thus strategy requires constant discipline and clear communication. Indeed, one of the most important functions of an explicit, communicated strategy is to guide employees in making choices that arise because of trade-offs in their individual activities and in day-to-day decisions.

Improving operational effectiveness is a necessary part of management, but it is not strategy. In confusing the two, managers have unintentionally backed into a way of thinking about competition that is driving many industries toward competitive convergence, which is in no one’s best interest and is not inevitable.

Managers must clearly distinguish operational effectiveness from strategy. Both are essential, but the two agendas are different.

The operational agenda involves continual improvement everywhere there are no trade-offs. Failure to do this creates vulnerability even for companies with a good strategy. The operational agenda is the proper place for constant change, flexibility, and relentless efforts to achieve best practice. In contrast, the strategic agenda is the right place for defining a unique position, making clear trade-offs, and tightening fit. It involves the continual search for ways to reinforce and extend the company’s position. The strategic agenda demands discipline and continuity; its enemies are distraction and compromise.

Strategic continuity does not imply a static view of competition. A company must continually improve its operational effectiveness and actively try to shift the productivity frontier; at the same time, there needs to be ongoing effort to extend its uniqueness while strengthening the fit among its activities. Strategic continuity, in fact, make an organization’s continual improvement more effective.

A company may have to change its strategy if there are major structural changes in its industry. In fact, new strategic positions often arise because of industry changes, and new entrants unencumbered by history often can exploit them more easily. However, a company’s choice of a new position must be driven by the ability to find new trade-offs and leverage a new system of complementary activities into a sustainable advantage.

1. I first described the concept of activities and its use in understanding competitive advantage in Competitive Advantage (New York: The Free Press, 19851. The ideas in this article build on and extend that thinking.

2. Paul Milgrom and John Roberts have begun to explore the economics of systems of complementary functions, activities, and functions. Their focus is on the emergence of “modern manufacturing” as a new set of complementary activities, on the tendency of companies to react to external changes with coherent bundles of internal responses, and on the need for central coordination-a strategy-to align functional managers. In the latter case, they model what has long been a bedrock principle of strategy. See Paul Milgrom and John Roberts, “The Economics of Modern Manufacturing: Technology, Strategy, and Organization,” American Economic Review 80 (1990): 511-528; Paul Milgrom, Yingyi Qian, and John Roberts, “Complementarities, Momentum, and Evolution of Modern Manufacturing,” American Economic Review 81 (1991184-88; and Paul Milgrom and John Roberts, “Complementarities and Fit: Strategy, Structure, and Organizational Changes in Manufacturing,” Journal of Accounting and Economics, vol. 19 (March-May 1995): 179-208.

3. Material on retail strategies is drawn in part from Jan Rivkin, “The Rise of Retail Category Killers,” unpublished working paper, January 1995. Nicolaj Siggelkow prepared the case study on the Gap.

Japanese Companies Rarely Have Strategies

The Japanese triggered a global revolution in operational effectiveness in the 1970s and 1980s, pioneering practices such as total quality management and continuous improvement. As a result, Japanese manufacturers enjoyed substantial cost and quality advantages for many years.

But Japanese companies rarely developed distinct strategic positions of the kind discussed in this article. Those that did Sony, Canon, and Sega, for example were the exception rather than the rule. Most Japanese companies imitate and emulate one another. All rivals offer most if not all product varieties, features, and services; they employ all channels and match one anothers’ plant configurations.

The dangers of Japanese-style competition are now becoming easier to recognize. In the 1980s, with rivals operating far from the productivity frontier, it seemed possible to win on both cost and quality indefinitely. Japanese companies were all able to grow in an expanding domestic economy and by penetrating global markets. They appeared unstoppable. But as the gap in operational effectiveness narrows, Japanese companies are increasingly caught in a trap of their own making. If they are to escape the mutually destructive battles now ravaging their performance, Japanese companies will have to learn strategy.

To do so, they may have to overcome strong cultural barriers. Japan is notoriously consensus oriented, and companies have a strong tendency to mediate differences among individuals rather than accentuate them. Strategy, on the other hand, requires hard choices. The Japanese also have a deeply ingrained service tradition that predisposes them to go to great lengths to satisfy any need a customer expresses. Companies that compete in that way end up blurring their distinct positioning, becoming all things to all customers.

This discussion of Japan is drawn from the author’s research with Hirotaka Takeuchi, with help from Mariko Sakakibara.

Finding New Positions: The Entrepreneurial Edge

Strategic competition can be thought of as the process of perceiving new positions that woo customers from established positions or draw new customers into the market. For example, superstores offering depth of merchandise in a single product category take market share from broad-line department stores offering a more limited selection in many categories. Mail-order catalogs pick off customers who crave convenience. In principle, incumbents and entrepreneurs face the same challenges in finding new strategic positions. In practice, new entrants often have the edge.

Strategic positionings are often not obvious, and finding them requires creativity and insight. New entrants often discover unique positions that have been available but simply overlooked by established competitors. Ikea, for example, recognized a customer group that had been ignored or served poorly. Circuit City Stores’ entry into used cars, CarMax, is based on a new way of performing activities – extensive refurbishing of cars, product guarantees, no-haggle pricing, sophisticated use of in-house customer financing that has long been open to incumbents.

New entrants can prosper by occupying a position that a competitor once held but has ceded through years of imitation and straddling. And entrants coming from other industries can create new positions because of distinctive activities drawn from their other businesses. CarMax borrows heavily from Circuit City’s expertise in inventory management, credit, and other activities in consumer electronics retailing.

Most commonly, however, new positions open up because of change. New customer groups or purchase occasions arise; new needs emerge as societies evolve; new distribution channels appear; new technologies are developed; new machinery or information systems become available. When such changes happen, new entrants, unencumbered by a long history in the industry, can often more easily perceive the potential for a new way of competing. Unlike incumbents, newcomers can be more flexible because they face no trade-offs with their existing activities.

The Connection with Generic Strategies

In Competitive Strategy (The Free Press, 1985), I introduced the concept of generic strategies – cost leadership, differentiation, and focus – to represent the alternative strategic positions in an industry. The generic strategies remain useful to characterize strategic positions at the simplest and broadest level. Vanguard, for instance, is an example of a cost leadership strategy, whereas Ikea, with its narrow customer group, is an example of cost-based focus. Neutrogena is a focused differentiator. The bases for positioning – varieties, needs, and access – carry the understanding of those generic strategies to a greater level of specificity. Ikea and Southwest are both cost-based focusers, for example, but Ikea’s focus is based on the needs of a customer group, and Southwest’s is based on offering a particular service variety.

The generic strategies framework introduced the need to choose in order to avoid becoming caught between what I then described as the inherent contradictions of different strategies. Trade-offs between the activities of incompatible positions explain those contradictions. Witness Continental Lite, which tried and failed to compete in two ways at once.

Alternative Views of Strategy

The Implicit Strategy Model of the Past Decade

· One ideal competitive position in the industry

· Benchmarking of all activities and achieving best practice

· Aggressive outsourcing and partnering to gain efficiencies

· Advantages rest on a few key success factors, critical resources, core competencies

· Flexibility and rapid responses to all competitive and market changes

Sustainable Competitive Advantage

· Unique competitive position for the company

· Activities tailored to strategy

· Clear trade-offs and choices vis-à-vis competitors

· Competitive advantage arises from fit across activities

· Sustainability comes from the activity system, not the parts

· Operational effectiveness a given

ILLUSTRATIONS

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By Michael E. Porter

Michael E. Porter is the C. Roland Christensen Professor of Business Administration at the Harvard Business School in Boston, Massachusetts.

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The Leader as a Strategist Report

The organization named McDonalds [Misspelling: according to their website, the spelling of the fast-food company is “McDonald’s”] is opted [The passive voice is a form of “be” (is) and a participle (opted). Over-use of the passive voice can make paragraphs officious and tedious to read. Prefer the active voice. For example, passive voice = The paper was completed on time. Active voice = the student completed the paper on time. See Center for Writing Excellence > Tutorials & Guides > Grammar & Writing Guides > Active & passive voice] for carrying out the discussion further. The company is recognized [Passive voice ] to be a fast-food outlet and is established [Passive voice ] in the United States. It is well-known for its fast-food and is sharing a global presence also. The customer contentment is taken [Passive voice ] as a priority. The running conditions pinpoint that the company with the help of its key members puts in best possible [Redundancy–the “X-est” means the greatest degree of X, so “possible” is unnecessary] efforts. Moreover, the company also shows proper concern towards [The preferred spelling is “toward”] its employees by handling their expectations with proper potential. The company is experiencing immense presence amongst [Archaic word. Use “among”] the key customers as well.

As a new leader, the requirement is to assess the organization’s overall [Wordiness: unless meaning denim work clothes, “overall” is general and vague and contributes little to the sentence] alignment between its vision, mission, values, and strategy. In this way, the business processes can also be [This is smoother as “also can be”] made [Passive voice ] out effective and better than before [Remove “than before” (the meaning remains the same)] . All [Writing suggestion: “All” or “all of” used as an intensifier very often can be removed with no loss of meaning] what is being [Doctoral rule (but good advice for any academic writer)–If not a noun (as in “human being”), the word “Being” is hard to imagine; it means “existing.” Try to rewrite this without using “being”–with action words like “attending,” “working,” “living,” “experiencing,” simply “as”–or even removing “being” completely] demanded [Passive voice ] is to have an effective check on the respective areas. For the same, the need is to experience far better resultants and that too at an active pace.

1. An analysis of the strategic cascade of the organization.

The strategy of the company is to generate far better resultants. It is important enough to adopt effective practices and to manage business accordingly. The need of the hour states that the business should be helped [Passive voice ] to grow and [Misspelling: “and” is a conjunction (apples and oranges); “an” is an indefinite article (I ate an apple)] function with proper potential. Moreover, the company aims more on adopting such effective practices that lead [Check spelling–if the sentence is in the past tense, the verb conjugation is “led”] to greater growth and development. It is important enough to make business growing and developing (Jones & Hill, 2009).

All what is being demanded [Passive voice ] is to make customers feel special and contended. For the same, the best possible strategies are made employed [Passive voice ] to carry on with the best possible growth. It [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– the best possible growth] would turn out to be significant enough to experience far better resultants. This is termed [Passive voice ] to be important enough to form effective knowledge and understanding in the [The preposition should be “of” ] key areas. The key strategies that are [Writing suggestion: rewrite the sentence to remove “that are”] considered [Passive voice ] by the company are to help business to meet the expected levels.

· The target market for the company are primarily youth. At the same time, the key customers come under the age bracket of 12-60 years of age. [Wordiness: “years old” or “years of age” can be removed–the meaning will be the same] The company also focuses on kids [Unless meaning young goats, this is slang and inappropriate in academic writing; use “children”] and family oriented branding. On the whole [This expression is wordy and vague; the sentence means the same without it] , the company design products that are [Writing suggestion: rewrite the sentence to remove “that are”] going to [Wordiness: These words mean simply “will”] meet the needs and requirements of the key customers. This is known to be the best part and leads to make situations highly effective and better than before [Remove “than before” (the meaning remains the same)] .

· The value proposition of the company is acting upon customers’ needs and desires in a uniform manner. It covers up key aspects and helps in offering a sense of satisfaction and contentment to the key audience. In general, the company serves to be the place that is [Wordiness: see if you can remove “that” or “that is”] meant for offering low cost and quality product at a clean setting. This seems to be important enough to carry on business functions with proper effectiveness. Along with this, the workforce of the company is dedicated [Passive voice ] towards [The preferred spelling is “toward”] making customers feel good enough. This is surely going to help the customers to obtain a better feel. It means a lot [Only commercial shipments and real estate are measured in lots. To use “a lot of” to mean “many,” “much,” or “a large amount” is a colloquialism (not universally clear). Use another term.] to go for managing situations at its best possible manner. Along with this, the employees so possessed helps the company meet the needs and requirements of the intended audience. With this, it [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– this] can also be [This is smoother as “also can be”] ensured [Passive voice ] that the situations are turning out to be highly well-versed and better than before [Remove “than before” (the meaning remains the same)] (Burrow, 2011).

· The product and services offered by the company are effectively positioned [Passive voice ] . It is recognized [Passive voice ] to be useful enough in helping the customers to carry on business practices at an active pace. At the same time, the products and [in academic writing, if this is a series, place a comma before the final conjunction (and)] services are customized [Passive voice ] to match with the target audience expectations. The specific features and attributes that are [Writing suggestion: rewrite the sentence to remove “that are”] carried [Passive voice ] out by the products and services are that it is qualitative and specifically designed to make customers highly pleased. The company also shows proper concern towards [The preferred spelling is “toward”] customer’s health. For the same, the menu list carries some healthy items. It is merely formed [Passive voice ] to meet customer’s expectations only. This is surely going to help the customers to obtain best possible resultants. With this, it [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– this] can also be [This is smoother as “also can be”] ensured [Passive voice ] that the running conditions need to be made managed [Passive voice ] and highly well-versed.

At the same time, its value gets reflected in its pricing, distribution, marketing communications. It can also be [This is smoother as “also can be”] understood in a way that the product is priced [Passive voice ] low just to make it used by people at a massive level. Along with this, the distribution process is also quite well-defined. It seems to be effective enough to manage business expectations with proper potential. In this way, it can also be [This is smoother as “also can be”] stated [Passive voice ] that the product flow is maintained [Passive voice ] on a regular basis. The marketing communication is also said to be impressive. It makes use of the best possible modes to help the customers to obtain the best possible resultants.

· The organization is sustainable different from its competitors with respect to different aspects. Most importantly [The extra syllable in “importantly” adds no additional meaning because the word is seldom adverbial in intention. Use the word without “ly”] , the organization has duly felt [Clearer writing suggestion: if “felt” is used in the sense of “to believe or think,” it is a cliché and vague; use “believed” or “thought”] [Style suggestion: if “felt” is used in the sense of “to believe or think,” it is a cliché and vague; use a form of “believe” or “think”] that the customer contentment should not be ignored [Passive voice ] at any cost. For the same, the need is to experience hopeful resultants. It holds great [Writing suggestion: “great” is an overworked word, too frequently seen, and too vague. It has too many meanings: huge, superior, numerous, etc. Use a more specific adjective] importance from the perspective of experiencing immense growth and progression [Check spelling–Progression means “sequence,” but “progress” is “advancement, development, movement,” etc. ] . The accentuation needs to be more on realizing best possible growth and development. This means a lot [Avoid using “lots” or “a lot of”] to carry on business practices with due effectiveness. As far as competitors are concerned [Passive voice ] , the company is believed [Passive voice ] to be sustainable in terms with maintaining the ecological balance at an active pace (Ferrell & Pride, 2011).

The uniqueness so considered would allow the company to carry on business practices with due effectiveness. All what is being demanded [Passive voice ] is to manage business growth and development at its best possible manner. This seems to be important enough to offer a sense of contentment to the customers by maintaining the uniqueness. The company is termed [Passive voice ] to be effective enough in comparison to its competitors. This is so because the company is believed [Passive voice ] to be highly competent and [Run-on sentence: Insert comma before “and” if the following is an independent clause (not part of a series)] it adopts effective marketing and likely practices. It makes it successful and growing in the respective industry.

2. SWOT Analysis

Strengths

• The advantages that organization having [“having” as a transitive verb is vague. Reconsider the sentence using “possessing,” “acquiring,” “developing,” etc. Often “having” can be deleted] strong brand recognition, global presence, customer loyalty. All these altogether helps the company to obtain best possible growth and progression [Check spelling–Progression means “sequence,” but “progress” is “advancement, development, movement,” etc. ] . Along with this, it [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– this] can also be [This is smoother as “also can be”] ensured [Passive voice ] that the business is obtaining far better resultants by means of these strong points. It is important enough to understand the importance of these aspects and to carry on business practices at an active pace.

• The most effective and the best part of the company is the way it lives up to its customer’s expectations. It would also ensure that the running conditions are turning out to be hopeful enough. The best possible ways are considered [Passive voice ] to match with customer’s desires and wishes. It would also ensure that the business growth should not be ignored [Passive voice ] at any cost. This is believed [Passive voice ] to be important enough to manage business growth and development with proper potential. All what is being demanded [Passive voice ] is to execute business practices with proper potential. The key programs are made ensured [Passive voice ] to help the clients to obtain immense growth and satisfaction (Bohm, 2009).

• The unique or lowest-cost resources that can draw upon that others cannot are the product quality and service promptness.This [If not in a URL, leave a space after the period] is termed [Passive voice ] to be helpful enough to manage business growth and development at an active pace. It is considered [Passive voice ] to be important enough to manage situations with proper potential. This greater demands for supporting the company to manage situations accordingly. It seems to be important enough to obtain the best possible growth and progression [Check spelling–Progression means “sequence,” but “progress” is “advancement, development, movement,” etc. ] . • The people see strengths with respect to effective market potential, having global presence, brand recognition and [in academic writing, if this is a series, place a comma before the final conjunction (and)] matching with customer’s wishes and desires. It would also help in enjoying an effective name and image amongst the key people. This adds on great growth and development for the company itself.

• Factors that mean “get the sale” are to offer key benefits to the customers in the form of the finished product. This persuades the clients to obtain the best advantage by using it. It means a lot [Avoid using “lots” or “a lot of”] to carry on business practices with proper effectiveness.

• The organization’s unique selling proposition (USP) is the quality maintained in the product at such cost-effective prices.

Weaknesses

• The aspects of product or service need to be improved [Passive voice ] are adding in more healthy supplements. At the same time, this would help in making others feel good enough. It would be good enough to go in understanding the key expectations of the clients only.

• Market segments or competitive areas need to be avoided are aged populations and competing on the base of price. There stays great necessity to go from forming knowledge and understanding with the customer’s requirements (Bohm, 2009).

• The people locate weaknesses in the form of high employee turnover, capitalization on organic trends and fluctuations in profit levels. This is termed [Passive voice ] to be the key weaknesses that are [Writing suggestion: rewrite the sentence to remove “that are”] looked [Passive voice ] by the people.

• Factors that can make lose sales are lack of competitive advantage, the requirement of quality control and not understanding customer’s [if not possessive, “customers” is spelled without the apostrophe] needs with changing time.

Opportunities

• The good opportunities that can be spotted [Passive voice ] by the company are having [Writing suggestion: the present progressive “are having” is an awkward phrase; use the present tense–simply “has,” “have,” or “are to have”] healthy items on the menu list, showing more concern towards [The preferred spelling is “toward”] customer’s health by adopting hygienic ways, maintaining cleanliness at the respective point. It seems to be important enough to make sure that business practices are turning out to be helpful enough.

• The interesting trends one need to be aware of are getting acknowledged with change in technological trends, market opportunities and [in academic writing, if this is a series, place a comma before the final conjunction (and)] lifestyle trends. It can also turn out to be effective enough in carrying on business practices with due effectiveness. Along with this, the business can also be [This is smoother as “also can be”] helped [Passive voice ] to grow and develop in an incessant manner.

Threats

• The obstacles that can be faced [Passive voice ] by the company is changing customer’s expectations, government policies, intense level of competition and different cultural settings. This seems to be important enough to form knowledge and understanding in the [The preposition should be “of” ] key areas. It is termed [Passive voice ] to be effective enough to allow the company to grow and develop incessantly.

• The competitors are also having a good presence in the marketplace. The best possible moves are made adopted [Passive voice ] just to have better positioning at the industry level. There stays great necessity to go from forming proper knowledge and understanding in the [The preposition should be “of” ] key areas. Competitors of the company are also actively participating in obtaining good growth and progression [Check spelling–Progression means “sequence,” but “progress” is “advancement, development, movement,” etc. ] (Lomax & Stokes, 2008).

• The quality standards or specifications are primarily designed [Passive voice ] for for [Typographical error: eliminate duplicate word (if on the same line)] products, or services changing. This means a lot [Avoid using “lots” or “a lot of”] to help the customers to possess an effective image towards [The preferred spelling is “toward”] the company. Not only this, the business practices can also be [This is smoother as “also can be”] made [Passive voice ] out effective and hopeful in nature [Vague wording–unless the intended meaning is “in the forest,” “in nature” communicates very little and can be deleted with no change in meaning] . It seems to be important enough to make customers feel highly pleased and satisfied.

• The changing technology is threatening the position of the company. For this, the company is supposed [Passive voice ] to form and develop knowledge towards [The preferred spelling is “toward”] it. This turns out to be effective enough to manage business practices accordingly.

• It experiences cash-flow problems and fluctuations related to profit levels. It is important enough to adopt such effective practices that helps in executing business functions accordingly. Along with this, the organization needs to work hard for bringing regular processing of the cash flow operations.

• The weaknesses that seriously threaten business are changes [Join a d to “change” to form the participle–“changed”] received [Passive voice ] in customer’s requirements, market uncertainty and [in academic writing, if this is a series, place a comma before the final conjunction (and)] cultural setting.

3. Summary of the internal environment

1. Structure: The organization follows top to down approach. It is believed [Passive voice ] to be important enough to manage business growth and development accordingly. This turns out to be effective enough to help the company to assign tasks and activities in a good way. The need is just to help the company to perform the key functions with full effectiveness. The structure of the company is quite clear and well-defined. It adopts effective ways to assign formal roles and responsibilities among the members of the company. The decision-making authority lies within the head of the company. But [In academic writing, avoid starting a sentence with a conjunction ] at the same time, the members or the key employees are free to participate or give suggestions on any of the key areas. The employees of the company are expected [Passive voice ] to have expertise and skills and efficiency in handling work tasks. The organization chart is believed [Passive voice ] to be important enough and [Run-on sentence: Insert comma before “and” if the following is an independent clause (not part of a series)] it pinpoints and its implied structure directs the decision making, resource allocation and [in academic writing, if this is a series, place a comma before the final conjunction (and)] [Insert a comma before this word if this is the last in a list of more than two — or if it begins a new clause] workflow of the organization. It is consistent with the strategy of the company as well. The need of the hour states that the organizational structure is quite well-versed and helps in managing situations with proper effectiveness (Porter, 1996).

2. Systems: The system prevailing in the organization is believed [Passive voice ] to be important enough. It allows the company to manage business functions at an appropriate basis. This seems to be helpful enough to maintain proper governance and orderliness in the key areas. At the same time, the information flow should also move on [Phrasal verb: These two words mean something different from the two words separately (looking up each word in the dictionary would not produce the meaning), which could cause misinterpretation in a business communication if the reader is not from your region (or country). Try simpler wording, such as “advance,” “continue,” or “progress”] smoothly and effortlessly. It makes sure that the information flows in a proper way. All what is being demanded [Passive voice ] is to manage business practices with due effectiveness.

With the help of proper and well-versed information flows, the coordination between groups and across the organization structure would go on smoothly. Along with this, the synchronization would be formed [Passive voice ] amongst the management and the employees. It assists the company to carry on functions with full potential. At the same time, the direct worker behavior, performance management, financial management, operating, forecasting and [in academic writing, if this is a series, place a comma before the final conjunction (and)] planning, and other regulating mechanisms should also be concentrated [Passive voice ] . The worker behavior would lend a helping hand [Cliché–“lend a helping hand” is an old phrase, seen too often, and marks your writing as unoriginal. Try to express the idea in another way] in getting acquainted with an employee’s contribution.

In addition to this, the performance management would help in assessing the employee’s competence in handling the key roles. Financial management is very much requisite to make optimum use of financial resources. The operating, forecasting and [in academic writing, if this is a series, place a comma before the final conjunction (and)] planning and other regulating mechanisms should also be taken [Passive voice ] into consideration. It would also ensure that the situations are turning out to highly well-versed and hopeful enough. All these systems are termed [Passive voice ] to be effective enough in helping the company to form an alignment of workers and their actions with the strategy. This turns out to be effective enough in executing business practices with proper potential. Moreover, the workers of the company would also be permitted [Passive voice ] to adopt key practices to manage situations accordingly (Western, 2007).

3. Culture: The organizational culture is termed [Passive voice ] to be effective enough and allows the business to obtain best possible resultants. With this, it [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– this] can also be [This is smoother as “also can be”] ensured [Passive voice ] that the business functions should move on properly. The company’s culture is very well-defined and encourages the employees to contribute with full sincerity. This is believed [Passive voice ] to be helpful enough to manage business situations at its best possible degree. The need of the hour states that the culture of the company is believed [Passive voice ] to be helpful enough. It seems to be important enough to handle business obligations with due effectiveness.

The need of the hour states that the best possible knowledge should be gained [Passive voice ] to handle business obligations accordingly. The culture of the organization is believed [Passive voice ] to be effective enough and contributes towards [The preferred spelling is “toward”] company’s growth and progression [Check spelling–Progression means “sequence,” but “progress” is “advancement, development, movement,” etc. ] . Not only this, the business would be allowed to reach the expected levels. In this way, it can also be [This is smoother as “also can be”] stated [Passive voice ] that the running conditions need to be analyzed properly. It would result into effective and successful accomplishment of the key tasks.

Along with this, the culture comprises of the unwritten rules and norms that govern worker behavior and help coordinate the activities across structural boundaries. It would also ensure that the company would be helped [Passive voice ] to monitor the surrounding ambiance followed by employee’s behavior. The culture of the organization is figured [Passive voice ] out to be enabler in nature [Vague wording–unless the intended meaning is “in the forest,” “in nature” communicates very little and can be deleted with no change in meaning] . It sees to it that the corporate strategy should be made managed [Passive voice ] and well-versed. This turns out to be effective enough and offers with the best possible outcomes. It [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– the best possible outcomes] is firmly believed [Passive voice ] that the culture of the company seems to be supportive enough in helping the company to grow and [Misspelling: “and” is a conjunction (apples and oranges); “an” is an indefinite article (I ate an apple)] proceed.

The specific behaviors embedded in the culture and that support the strategy of the company is employee’s [if not possessive, “employees” is spelled without the apostrophe] dedication, adjustment towards [The preferred spelling is “toward”] changing requirements, ensuring company’s growth and development accordingly. It is important enough to work on these specific behaviors just to obtain great growth. This would also ascertain the business practices are going on smoothly and efficiently. It means a lot [Avoid using “lots” or “a lot of”] to manage business practices at its best possible extent (Northouse, 2009).

The specific behaviors liable for blocking the strategy are less favor towards [The preferred spelling is “toward”] changing technological trends, lack of supportive working ambience, lack of concern towards [The preferred spelling is “toward”] employee’s betterment. This is believed [Passive voice ] to be effective enough to make business growing and developing. It is very much important to have a look at these aspects just to grow and [Misspelling: “and” is a conjunction (apples and oranges); “an” is an indefinite article (I ate an apple)] function with proper effectiveness.

These behaviors would also allow the company to realize goals and objectives with due effectiveness. It [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– due effectiveness] is highly important to go for managing business practices accordingly. All what is being demanded [Passive voice ] is to carry on business practices at its best possible manner. At the same time, the business would be able to thrive and flourish with due smoothness.

4. Kouzes and Posner’s Five Practices as a framework: The five of these practices are modelling the approach, instigate a shared vision, face the process, facilitate others to act and persuade the heart. All of these five practices are able to [Wordiness–“are able to” means simply “can”] help one to lead and to obtain immense success at an active pace. This is termed [Passive voice ] to be effective enough to carry on business functions with full potential. It [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– full potential] is important enough to experience greater growth and development.

• Company Culture

O The values and culture of the organization are primarily linked [Passive voice ] towards [The preferred spelling is “toward”] offering a sense of satisfaction to the target audience. For the same, the company adopts effective effective [Typographical error: eliminate duplicate word (if on the same line)] values and maintain positive culture. This would encourage the company to meet customer’s expectations in its best possible manner (Mitchell, 2008).

O The values of the organization are to maintain positive working ambiance, sustaining the quality in the product and services so offered. Along with this, catering to the needs and requirements of the key customers. It means a lot [Avoid using “lots” or “a lot of”] to perform the key roles and functions at its best possible manner.

O They get reflected in the behaviors of the employees at work. Each and every [Redundancy: “each” and “every” mean the same thing, so use either word–but not both] employees [Check spelling–Possessive employee’s] see to it that the customers are treated [Passive voice ] efficiently. This greater demands for allowing the business to generate the best possible growth and resultants. It is equally important to go for managing business practices with full effectiveness. The need of the hour states that the business practices should be workable enough. At the company, the employees shows dedication and devotion towards [The preferred spelling is “toward”] customers by acting upon their wishes and desires.

• Employee Behaviors

O The behaviors in an organization is experienced [Passive voice ] to be effective enough. It seems to be important enough to execute the key tasks and practices with full effectiveness. All what is being demanded [Passive voice ] is to allow the company to grow and [Misspelling: “and” is a conjunction (apples and oranges); “an” is an indefinite article (I ate an apple)] exceed incessantly. There stays great necessity to go for managing business functions with proper effectiveness. This greater demands for helping the company to meet the expected levels. The behaviors are supposed [Passive voice ] to be made [Passive voice ] understood in an active manner (Martin & Chaney, 2007).

O These behaviors are believed [Passive voice ] to be consistent with the business strategy. It [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– the business strategy] can also be [This is smoother as “also can be”] comprehended [Passive voice ] in a way that the business functions should not be overlooked [Passive voice ] . The employees fully understand the business strategy and acts upon it as well. It would also ensure that the situations are turning out to be highly well-versed and better than before [Remove “than before” (the meaning remains the same)] . The aim is just to experience far better resultants. This is believed [Passive voice ] to be effective enough to manage business practices accordingly.

O It can conflict with the strategy with respect to issues linked with unfavorable areas. It [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– the strategy with respect to issues linked with unfavorable areas] may be possible that the strategy can lead to conflicting behaviors, if it does not match with employee’s expectations. The employees have the right to have an effective knowledge and understanding in the [The preposition should be “of” ] key areas. This would make sure that the situations are going on smoothly and effortlessly. It is equally important to meet the expected levels.

O The new behaviors so required to align with the strategy are to raise employee’s potential. At the same time, the employees should be made [Passive voice ] informing about the respective behaviors. It would also ensure that the employee’s [if not possessive, “employees” is spelled without the apostrophe] needs and requirements are supposed [Passive voice ] to be made [Passive voice ] hopeful and better than before [Remove “than before” (the meaning remains the same)] . This is surely going to allow the company to manage business expectations accordingly. It means a lot [Avoid using “lots” or “a lot of”] to understand the significance of business strategy. The new behaviors are mainly linked [Passive voice ] with forming proper knowledge and understanding in the [The preposition should be “of” ] key areas. Not only this, the business would grow and function effectively.

• Leadership

O The leaders create new behaviors to support the strategy by formulating such effective plans that leads to make employees committed towards [The preferred spelling is “toward”] the key task. It seems to be important enough to carry on business functions with proper effectiveness. Along with this, the understanding is supposed [Passive voice ] to be formed [Passive voice ] with the pertinent areas. The leaders are held [Passive voice ] liable for making employees to accommodate with the new behaviors. In this way, it can also be [This is smoother as “also can be”] stated [Passive voice ] that the situations need to be made controlled [Passive voice ] and better than before [Remove “than before” (the meaning remains the same)] (Mitchell, 2008).

The leaders direct the workers of the company to think wide and different. This seems to be effective enough in carrying on business functions at an active pace. All what is being demanded [Passive voice ] is just to form connection with the business strategy. Due to [Check word usage: This phrase is most accurate in referring to something owed ($5 due) or an arrival time (due at 6:00)–try “because” or “because of”] this only, it can be stated [Passive voice ] that the company is able to [Wordiness–“is able to” means simply “can”] generate best possible outcomes. This seems to be important enough to form an effective understanding in the [The preposition should be “of” ] key areas.

O The specific actions that would be implemented [Passive voice ] to communicate, motivate, model the way, coach, inspire the vision, challenge the process, and encourage the heart are to introduce best possible aspects just to manage things in a good way. It is very much requisite to go for managing business practices accordingly. The actions that are [Writing suggestion: rewrite the sentence to remove “that are”] primarily required [Passive voice ] are to consider innovation, creativity and [in academic writing, if this is a series, place a comma before the final conjunction (and)] [Insert a comma before this word if this is the last in a list of more than two — or if it begins a new clause] newness to the business areas (Hall, 2007).

With this, it [Writing suggestion: often you can remove “With” and “it” (and the comma before “it” if present), simplifying the sentence– this] is for sure that the communication, leading, directing and [in academic writing, if this is a series, place a comma before the final conjunction (and)] challenges can be handled [Passive voice ] with proper effectiveness. At the same time, the employees are helped [Passive voice ] to experience hopeful resultants. It would help in allowing the employees to carry on business functions with utmost sincerity. Additionally, the business situations can also be [This is smoother as “also can be”] made managed [Passive voice ] and tackled successfully. The leadership adds to strength and [Misspelling: “and” is a conjunction (apples and oranges); “an” is an indefinite article (I ate an apple)] fortification to the company and directs its working and functioning. In the similar way, the business practices can also be [This is smoother as “also can be”] done [Passive voice ] growing and developing. All what is being demanded [Passive voice ] is to adopt such key practices that allow the business to grow and [Misspelling: “and” is a conjunction (apples and oranges); “an” is an indefinite article (I ate an apple)] function hopefully [This means “in a hopeful manner,” but it should not be used to mean “I hope” or “it is hoped”] .

References

Bohm, A. (2009). The SWOT Analysis. GRIN Verlag.

Burrow, L.J. (2011). Marketing. (3rd ed.). Cengage Learning.

Ferrell, C.O. & Pride, M.W. (2011). Marketing. (16th ed.). Cengage Learning.

Hall, M.D. (2007). Abc’s of Leadership. AuthorHouse.

Jones, G. &  Hill, C. (2009). Strategic Management Theory: An Integrated Approach. (9th ed.). Cengage Learning.

Lomax, W. & Stokes, D. (2008). Marketing: A Brief Introduction. Cengage Learning EMEA.

Martin, S.J. & Chaney, H.L. (2007). The Essential Guide to Business Etiquette. Greenwood Publishing Group. 

Mitchell, C. (2008). A Short Course in International Business Culture: Building Your International Business Through Cultural Awareness. (3rd ed.). World Trade Press.

Northouse, G.P. (2009). Leadership: Theory and Practice. (5th ed.). SAGE.

Porter, M. E. (1996). What Is Strategy?. Harvard Business Review, 74(6), 61-78.

Western, S. (2007). Leadership: A Critical Text. SAGE.