Many brands and entrepreneurs put their focus on the one thing they do best. This is a decent starting point but to have more of a competitive advantage, entrepreneurs should focus on a series of strengths. Furthermore, the focus should be on how well strategic components fit with each other. Good strategies depend on the connection among many things, on making interdependent choices (Magretta, 2012). This notion ties into Porter’s concept of “fit”.
In essence fit means the value or cost of one activity is affected by the way other activities are performed (Magretta, 2012). There are several forms of fit, with the first being consistency. Every element of a business should align with the company’s value proposition and contribute in one way or another. Similar to the second form of fit which occurs when activities reinforce each other. Similar to the concept of synergy, each value complements the other. The final form of fit is substitution. In this form, performing an activity makes it possible to eliminate another.
Hyman, M. R., & Sierra, J. J. (2010). Marketing research kit for dummies. Hoboken, NJ: John Wiley & Sons Inc.
Magretta, J. (2012). Understanding Michael Porter: the essential guide to competition and strategy. Boston, Mass: Harvard Business Review Press.
This is an excellent, concise synthesis of such a key concept. I definitely agree with Porter that a company needs to structure itself around its value proposition, as it thoroughly qualifies as the lifeblood that allows it to exist. Great job!
Leave a comment