Operational effectiveness (OE) means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency. It refers to any number of practices that allow a company to better utilize its inputs by, for example, reducing defects in products or developing better products faster. In contrast, strategic positioning means performing different activities from rivals’ or performing similar activities in different ways.Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.
…the essence of strategy is in the activities—choosing to perform activities differently or to perform different activities than rivals. Otherwise, a strategy is nothing more than a marketing slogan that will not withstand competition.Michael Porter, from an essay included in the book On Competition
In this “planning season,” two questions seem to always flow to to the top:
• How can we be better at what we do?
• How can we be different/do something different — that no one else is doing?
It is this second question that can lead to real strategic advantages.