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Unformatted text preview: I would like to analyse the two phrases separately “…The companies that are enduringly successful will be those that begin as early as possible to define and embody in their activities a unique competitive position. A period of limitation may be inevitable in emerging industries, but that period reflects the level of uncertainty rather than a desired state of affairs. In high-tech industries this imitation phase often continues much longer than it should.” – Michael Porter, What is Strategy, 1996 . In any business big or small, in any industry, businesses have to have a plan in order to be successful. Strategy is simply that – A Plan or a direction that the company needs to pursue in order to grow and become successful. Porter argues in ‘What is Strategy?” (HBR- 1996), that managers failed to distinguish between strategic planning and operational effectiveness. The strategy models of the 1980’s and 1990’s were based on increasing market share, reducing costs, growing productivity. As is today these are the key drivers for a successful business. Keys words like benchmarking, re-engineering, total quality management are still the forces that drive strategic thinking. A big impact on the airline industry in recent years has been the increase of low-cost airlines. These carriers mainly operate short-haul, their impact has been huge on the bigger carriers that also operated short-haul and long-haul. The most recent merger between BA and Iberia announce at the beginning of November 2009 is another example of how industry changes has caused companies to change strategy in order to remain sustainable. In the airline industry, for example. Since 9/11 many airline liquidated and are no longer in existence – Delta airlines, Swiss Airlines, Alitalia, etc. Other airlines for example Air France and Lufthansa have formed a merger to remain sustainable, grow their routes as they can code share on each other routes, share aircrafts on routes that are not great performers in filling seats, reduce aircraft fleet, reduce staff by integrating systems and support staff and thus reduce costs. Management need in this instance to analyse the operational effectiveness which are the current threats and opportunities that would realign the long-term strategy of the company. “Although a few companies with fundamental advantages prosper, the majority are doomed to a rat race no one can win. Ironically, the popular press, focused on hot, emerging industries, is prone to presenting these as special cases as proof that we have entered a new era of competition in which not of the old rules are valid. In fact, the opposite is true.” – Michael Porter, What is Strategy, 1996 ....
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This note was uploaded on 12/07/2009 for the course CY CY taught by Professor Gilbertzvobgo during the Spring '09 term at University of Liverpool.
- Spring '09