In the article, Porter emphasizes the fact that managers are paying too much attention to operational effectiveness without thinking about the overall importance of strategy. A good strategy intends to look into the future of the corporation, where operational effectiveness initiatives should only be a component of said strategy. A company can be very effective at cutting costs, making the services or products more profitable, but in the long run, there are no guarantees that those measures will be maintained; that is where a good strategy comes into play, by trying to find ways to add value to the company and maximize its competitive advantage, and in the process make it harder for competitors to replicate it.

Operational effectiveness is important to manage a successful corporation, but it is not crucial in the long run. At one point Blackberry was a very successful company, running an effective and efficient business, but they were not prepared for the competition (Apples iPhone) and now we think about Blackberry as the device used by businesspeople in the early 2000s. The company was not able to transform fast enough to compete with the emerging trends in the smartphone industry, and without a strong strategy in place to innovate, it lost significant market share and eventually stopped being a major competitor in the field.

The book Operations and Supply Chain Management (Jacobs & Chase, 2021) defines efficiency as doing something at the lowest possible cost. In the disaster restoration business, an efficient way to restore a home to its pre-loss condition would be to use the least number of technicians on-site, for the shortest amount of time, with the least amount of subcontractors to get the job done. On the other hand, operational effectiveness is doing the right thing for customers, in the case mentioned above, it would be having the necessary technicians on-site, for as many days as were needed, with as many subcontractors as were needed, to do an excellent job and satisfy the customers expectations.

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From a customers perspective, value is the product or service they are getting compared to the price they are paying for it. How valuable a product or service is, depends on the customers perception of said product or service, since they are the ones that decide to make the purchase or go with a competitor.

A company can create value for its product or service by showing the customer that what they are offering is better than the competition. As an example, I will use my dad and his love for Toyota. The first car he bought after he moved to the US was a Ford Taurus that went up in flames on 75 South, 3 months after he had purchased it. After that, he bought a Toyota Tercel, and he drove that tiny thing until it had more than 250,000 miles. After that, he purchased a Toyota Tundra and drove that until it had almost 300,000 miles. He purchased his 5^th Toyota Tundra 2 years ago. He is willing to pay more for a vehicle that will not leave him stranded. He sees value in Toyotas reliability and overall customer service, and it is safe to say he will be a life-long loyal customer of the company.

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1. Variety-based positioning does not focus on customer segments, but rather on the type of service or product provided to customers. This is not intended to satisfy all the customers needs, but instead to focus on a subset of those needs. For companies, it is important not only to determine what service or product they will offer but also which one they are not willing to offer. A company that comes to mind when thinking about variety-based positioning is Crocs Shoes. People either love them or hate them and would not be caught dead wearing them (I happen to fall on this camp). They provide a particular type of shoe, made of the same material, but the target customer varies from young kids to nurses, cooks, etc. Crocs Shoes do not provide a different style for different occasions, they just stick with what they are known for, which is easy to clean, durable, and colorful rubber shoes.
2. Needs-based positioning spots a particular customer segment, and then the goal is to provide a more tailored experience to most, if not all, of their needs. The Ritz-Carlton credo states that they pledge to provide the finest personal service and facilities by fulfilling the unexpressed wishes of every guest. The services provided are personalized to each guest to grant the most luxurious experience their guests are accustomed to in their daily lives.
3. Access-based positioning segments customers based on geographic location, for example, making it difficult for other competitors to reach the same customer base. Rise Broadband offers fixed wireless internet to 5% of US homes, mainly focused in remote and rural areas. It can offer a better service to a target segment of the population that does not have many options to get good and reliable internet access. It limits the service areas it operates in to maximize results.

Tradeoffs are sacrifices that a company needs to make to provide a better product or service in the long run. Recently, my company had to reevaluate what services to offer. The fire division team (that includes the cleaning team) was spending a lot of time doing carpet cleanings, instead of focusing on the big jobs (ex. house damaged by fire where the structure and contents needed to be cleaned). The management team decided that we should not offer that service anymore, since it was negatively impacting the response time and the overall customer experience. The company will lose money since it is not providing the service anymore, but it will gain its reputation as the premier fire restoration service it is known for.

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Strategic fit refers to how strong each activity within an organization is in relation to other activities, and how each works and complements each other to make it harder for competitors to try to recreate (or imitate) said activities. The strategy as a whole is stronger than each distinct portion of the strategy. Creating a sustainable competitive advantage will allow a business to use its unique positioning to be more profitable, increase sales, provide a better customer experience, and gain market share.

3 types of strategic fit

• Simple Consistency consist of a company aligning their strategy with each activity they perform. Previously, I used the example of the Ritz-Carlton hotels, and how each of its activities aligns to provide a 5-star customer experience to its luxury clientele. The strategy remains consistent throughout the organization and its 108 hotels around the world.
• Activities are reinforcing, meaning that each separate activity as part of the whole strategy makes the rest of the activities stronger than they would have otherwise been by themselves.
• Optimization of effort happens when each activity communicates and works with the rest to eliminate unnecessary procedures and work in order to optimize productivity.

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