What is Strategy?
When describing strategy, many inexperienced business owners and entrepreneurs may define it as the plan they intend to use to grow their business, be the best, and outperform the competition. As this response may sound satisfying to many, the experts such as Michael Porter and others do not have any faith in it. According to the Harvard business review, a strategy is not a plan; it is a framework for decision-making, a set of guiding principles applied as the situation evolves (Bungay).
According to Michael Porter, a strategy is all about your ability to be unique and create value for the customers to outperform the competition while safeguarding your business from the negative impact of the five forces (Magretta).
As we have seen in prior blogs, more than fifty percent of small businesses fail within the first five years. In 2019, the percentage of failure was around ninety percent (Bryant). The reasoning is not yet clear, but time will tell. More than likely, a lack of strategy and planning, along with the economic decline, were significant contributors.
Michael Porter believes a good strategy must pass the five tests, including a distinctive value proposition, a tailored value chain, trade-offs, fit across the value chain, and continuity over time (Magretta).
As we go through the Entrepreneurial Strategy class (ENT660), I will focus my writing on how Sam’s Medical Lab strategy fits in with Porter’s understanding and teachings. I will post a series of reports, including Porter’s Five Forces, Key Success Factors, Industry Driving Forces, and others.
Bryant, Sean. “How Many Startups Fail and Why?” Investopedia, Investopedia, 9 Nov. 2020, www.investopedia.com/articles/personal-finance/040915/how-many-startups-fail-and-why.asp.
Bungay, Stephen. “5 Myths About Strategy.” Harvard Business Review, 22 Apr. 2019, hbr.org/2019/04/5-myths-about-strategy.
Magretta, Joan. Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Review Press, 2012.