Operational efficiency and strategic positioning sometimes they are used interchangeably, but they do not mean the same thing. Michael porter He has written several books and articles on the operational efficiency and strategic positioning. However, Porter in his article in the 1996 Harvard Business Review “What is the strategy?”, He separated these two concepts sharply.
In this article you will find:
First we will define Operational Efficiency
Product manufacturing is a clear example in which an organization can achieve operational efficiency. The Business Dictionary website defines operational effectiveness as:
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«Any type of practice that allows a company or other organization to maximize the use of its tickets by developing products at a faster rate than the competition or reducing defects, for example."
According Porter, operational efficiency It occurs when the organization performs specific activities better than its competitors. These activities are often similar from one organization to another. In other words, the organization can achieve
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And what is Strategic Positioning?
To understand it better we will explain it with an example. An example of strategic positioning is the brand of a company with a prominent presence in the market (loyal customers to the brand). A company with an established brand is in a position where it can price its products a lot. higher than a company that produces products of similar characteristics and quality under a brand less known.
Strategic positioning is about creating and maintaining a long-term sustainable advantage against competitors through the development of elementary competencies, which are not easy to copy. Strategic positioning is successful when the organization has identified and used the unique activities that provide added value to its products and services. An analysis tool to improve the strategic positioning is the Michael Porter value chain, with which any of the primary activities of the organization can be optimized.
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Comparison
Operational efficiency and strategic positioning they are essential elements of successful organizations. They both consist of doing specific tasks better than competitors. Both allow the organization to have the flexibility to compete in a world of constant change, in which businesses are rapidly transforming.
However, according to Porter's research, there is a fundamental distinction between operational effectiveness and strategic positioning. Operational effectiveness consists of "competing to be the best", while strategic positioning consists of "competing to be unique." While operational efficiency is essential within a company, the maintenance (long-term) of a competitive advantage is based on the ability of the organization to differentiate itself (in its products and services) from the competence.
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What do you think?
