Strategy By Michael Porter
I reviewed on article published in Economic Times.
Michael Porter is well known for his competitive Strategy that is used by many global companies to sharpen competitive advantage. It is a framework that generates the agile practical approach to leverage the business. If I would generalize the principle, it tells to use the skill in which you are perfect. Michael says, ‘None of this is creating unique products and needs. You need to understand what it is that makes you unique. The better you understand what this is and how you do it, the better you will be at responding to trends and meeting customer needs.’
Many companies struggled to do everything including production, marketing, and sales on their own, but didn’t succeed much. Some outsourced specific division to the specialized small companied and continued the successful business.
Michael Porter further says that aftermath of US recession, people resented the companies that only worked for profit irrespective of thinking about customers. This conviction maligned the reputation of companies. To deal with this many companies started spending on the society in the name of Corporate Social Responsibility(CSR). He said, ‘CSR or handing out some of your profits towards a cause is not strategy and it will not restore trust in business The future will see a social dimension being added to business strategy and companies who do this will be at an advantage.’ In later years, Companies like GE, Canon considered publicly environmental concerns developing due to company business.
Automation, mechanical companies used cleaner resources. Machines worked out to cause reduced emission. Nestle, Unilever addressed core issues like environment, water use, health and nutrition. This strategy has helped to increased customer relationship and created impact on society.
About Michael Porter:
MBA and PhD from Harvard Business School & Harvard University.
Research and publications over competitive advantage, Strategy, Management.
Founder of Monitor Group, Strategic Management Consultancy.