Week 4: "Muddy" Strategy and Technology

Without some form of technology it seems that no business will survive in today’s day and age. Technology is what helps out the most when it comes to a businesses strategy. So many companies sit back and wait for new innovations to be put on the shelves, why? It costs so much in research and development in creating new products that it is easier to let other companies do it so the other guys can do a little reverse engineering. Why is this muddy to me? It is this first time I have learned about these things. This can go both ways if you really look at it. When the iphone came out it was a huge success and still is, now there are android phones, when the ipad came out there are now tablets in all shapes and sizes. When groupon came out I think I read that within a short period of time there were 500 competitors. WOW!! All these me too products just so someone else can make a buck.

There is obviously a danger on relying just on technology I noted above, any company can create a product basically exactly like the new product that I just came up. According to Michael Porter you need to know the 5 competitive forces that shape strategy. He says that most companies rely on operational effectiveness and not on strategic positioning. If you look at the definition of operational effectiveness, “Performing the same tasks better than rivals perform them.” This seems like a great strategy, well at least so I thought. It is having the strategic positioning to make your company or organization succeed. An example in the book is FreshDirect and how they are ahead of everyone in the supermarket business in a major metropolitan area.

There is more to technology and strategy than reverse engineering a product. Look at Michael Porter and his 5 competitive forces that shape strategy. They are “Threats of New Entrants, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of Substitute Products or Services, Rivalry Among Existing Competitors.” For over 30 years these forces have helped successful companies become what they are today and continue to beat out the competition. I takes a lot I am sure to make a great product, but to make it more efficient, cheaper, and all the other things with the added technology needed is no easy task I am sure.