In his paper, “What is Strategy?”, Michael Porter explores some popular misapplications of the term strategy in a business context. He first highlights a frequent counterfeit of strategy: operational effectiveness. This is an appealing counterfeit since it deals with activities, which he acknowledges are at the center of strategy. The disconnect he observes has to do with reluctance to make trade-offs, which requires prioritizing and positioning (a limiting activity). Instead, many managers attempt to treat all activities as though they could be equally optimized for any organization. Activities, and more specifically interconnected systems of activities, should be the basis of strategy. A business’s choice of activities and method of execution have the ability to position it uniquely within a market. On the other hand, efforts to imitate competition in the choice and execution of activities can blur competitive positioning and undercut strategy. Knowing which activities to perform, how to perform them and when there are opportunities to improve operational effectiveness requires managers and business leaders to make trade-offs. Often these trade-offs will limit growth opportunities while preserving competitive positioning. When the right trade-offs are made, it will be more difficult for competitors to effectively imitate activities that would endanger existing market share. Trade-offs are critical to an effective strategy. Porter warns that “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” One take away is to watch for decisions that attempt to avoid a trade-off and instead accommodate multiple priorities simultaneously. When that occurs, it would be wise to ask whether the decision is likely to enhance or blur strategic positioning. If it blurs strategic alignment, it may be worth...

Jim Collins and Jerry Porras wrote a paper, Building Your Company’s Vision, which rehashes some of the material from prior books. Two ideas that they draw on in this paper include Big Hairy Audacious Goals and A focus on Core Ideology. The argument they make is that in order to establish a meaningful vision, awareness of existential purpose and a determination to invest in an ideal future are necessary. The idea behind Big Hairy Audacious Goals, shortened to BHAGs, is that they embody a future world or state in which the core purpose of the business has been fully realized and its potential reached. In such a statement, the management of a company is effectively declaring what success will look like, given the current understanding of the purpose for which the business exists. The authors first discussed purpose in terms of ideology, suggesting that in effective companies, a purpose is driven by something more fundamental and meaningful. In other words, core purpose (as they call it) in the absence of an ideological driver, is insufficient to establish a compelling vision. In order for a vision to be truly motivating there must be something deeper than financials and market share. On the whole, I find that Jim Collin’s conclusions and analogies fall flat with...

The topic for my research paper in Management Information Systems was cloud computing. Naturally I have a deep understanding of many cloud computing technologies, but it was good to review the nomenclature used in academic research. I gained some sophistication in segmenting the cloud computing space and differentiating it from grid computing and other infrastructure models. However, on the whole, cloud computing isn’t that different from traditional computing (I have to call it something). When comparing it to the advent of other technologies which are now common place, it has followed a similar trajectory. I can see a future where compute resources take on a boutique style differentiation model where consumption of cloud technology appeals to consumer preference as much as consumer need. Here’s a presentation I put together that summarizes my...

The term cloud computing has been a buzz term for a few years. One complaint about cloud computing is that everyone seems to mean something different. Much of the academic research compartmentalizes cloud computing into three categories, Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). The first two, IaaS and PaaS are of interest to software developers. SaaS is of more interest to end consumers. Infrastructure is the most flexible and requires a developer to make decisions about how an application will scale and recover from failures. Often Platform offerings manage details like scaling and reliability but provide less flexibility to the end developer. SaaS provides the consumer with a managed offering that is often available from anywhere and includes backups and security. From a management perspective, there are some alluring characteristics to embracing cloud computing. These must be weighed against security and privacy, especially for companies whose operations fall within the view of government regulators. You can read my review of the current research below. Download Cloud...

In leadership, it’s often as important to know one’s self as it is to know one’s followers. With this in mind, my leadership course required me to prepare a presentation exploring my own leadership style. In this personal leadership assessment I explore the role of several influences in my life, including books, virtues and family. When it came to mapping out the sequence for the presentation, I found it difficult to know where to start and where to end. To me, leadership is more of a process, for both the leader and the follower, than it is a state. Sequence is frequently upset. For this reason I also chose pencil for the sketches to indicate that I’m a work in progress, always striving to...

My marketing course made use of an online simulation which allowed students to form groups and operate a digital camera business. The inputs that were available to students included product parameters, marketing parameters, financial parameters and so on. My co-manager and I decided we would adopt a high quality, high margin strategy and go for low market share but focus on the high end customers. Unfortunately the algorithm didn’t accommodate this approach. It should have been obvious by year 8 in the simulation, but we persisted to see if there would be a cumulative effect that would reward the high quality approach. After year eight we could see that the simulation algorithm would not work with our strategy. We also noticed that the groups in the lead were focused almost exclusively on increasing market share. Despite low margins, they were making good profits based on large volume of sales. We changed our strategy in year nine. In the following three years we focused much more on market share by reducing our margins, especially in the entry level camera market. In year 11 we returned some focus to our camera quality, which slowed our growth somewhat. By this time our competitor’s growth had stagnated. Trending for the last three years showed that we would surpass the leader within another four years. Here’s a presentation that walks through our strategy and some key metrics from the...

Corporate Social Responsibility and ethical questions of stakeholder vs. stockholder analysis affect many businesses. For businesses that trade in limited natural resources, these issues have increased significance. In the analysis below, I explore how Fiji Water both profited from and suffered under environmental influences. There are many stakeholders who have interest in Fiji Water and its operations, both internal and external to Fiji. These include local residents, vendors external to Fiji and government. Each of these facets represents a cost benefit analysis for those who intend to put up the capital to fund the venture. It also represents potentially complicated issues from various points of view, including local residents, government officials, environmentalists and even regional and global participants. Download Fiji Water case...