Question

2. Fully explain the statement/quote (from Porter’s article, What is Strategy) below and why it is true. In your answers, please explain what is meant by fit and sustainability. I want you to explain the quote as if you were informing those top managers around you in order for them to realize how your company is going to achieve true competitive excellence and not settle for mediocrity. Explain the quote in a real practical, business way. “Strategic fit among many activities is fundamental not only to competitive advantage but also to the sustainability of that advantage.”

Answer 1

Managers, take initiatives to realize the vision and mission of the organization and drive the resources and capabilities of the organization in a particular direction. A set of initiatives, that help the organization match the resources and capabilities to the demand of the business environment to create best value for the consumer is considered as strategic fit or the best fit for the organization. It means that organization is doing best to satisfy the needs & wants of the target audience in a way that maximizes the value creation for them. While doing so, it develops competitive advantage in the market place. The outcome of initiatives that creates strategic fit, builds a steep learning curve for the organization, a dedicated human resource, promotion of innovation based culture and loyal customer base. These developments deliver competitive advantage to the organization. Here, the initiatives, also considers the best interests of the other stakeholders such as community, regulatory bodies, suppliers and employees. To take care of these stakeholders, the organization ensures to pursue the goal through initiatives that are not only morally right, but also considered as ethical in the society. It brings sustainability to the competitive advantage. So, it is always important for the managers to select those initiatives that are in-line with the vision & mission and work to gain competitive advantage. It brings strategic fit to the initiatives and sustainability to the competitive advantage.
It can be considered with one example. Starbuck Coffee has implemented sustainability as a strategy and it is across the value chain of the organization. The policies followed by the company is also guiding the farmers in Brazil and other locations who are producing coffee beans for the company. So, the initiatives are not only inside of the organization, but also it is across the chain from farmer to end consumers. It has developed competitive advantage as well as sustainability to the competitive advantage.