Operational Effectiveness Analysis
According to American Academic Michael Porter, operational effectiveness means performing similar activities better than rivals do. Porter even states in his “What is Strategy?” article “operational effectiveness is necessary but not sufficient.” It is possible to achieve a competitive advantage in this way. However, it is not possible to achieve a sustainable competitive advantage in this way. This is what Porter is addressing when he states “operational effectiveness is necessary but not sufficient.” One must go above and beyond simple operational excellence. Operational excellence is imitable.
Operational effectiveness is undoubtedly necessary, but it is not sufficient, because its techniques are easy to imitate. While operational …show more content…
In the early 1990s, Continental Airlines attempted to imitate Southwest Airlines and Southwest’s economic and affordable services. Continental Lite, originally referred to as CALite, was a short lived subsidiary of continental Airlines operating from 1993-1995. Continental Lite operated several different aircrafts in a fleet originally designed for normal Continental flights. These planes were stripped of their first class and replaces with all coach seating. Continental was never able to get off of the ground with this subsidiary because it could not reach the economies of scale that low-cost airlines like Southwest could. Southwest’s strategy of focusing entirely on the low-cost segment of customers worked well for them because that was their niche. Continental was trying to serve too many niches and it ultimately failed. Time magazine reported in February 1997 that Continental Airlines lost between 150 million to 300 million dollars on the short lived subsidiary Continental …show more content…
Porter scratches at the notion of “if it’s not broken, don’t try to fix it.” Often times, companies become paranoid that they are not doing enough to stay ahead of the competition, even though they may be the best at what they do. Referring back to the example of Continental Lite, Continental Airlines gave itself a larger dollar loss and a larger brand embarrassment than any of its competitors could have given it in a three year span of time. If your strategy is not broken, do not change your
Operational effectiveness is undoubtedly necessary, but it is not sufficient, because its techniques are easy to imitate. While operational …show more content…
In the early 1990s, Continental Airlines attempted to imitate Southwest Airlines and Southwest’s economic and affordable services. Continental Lite, originally referred to as CALite, was a short lived subsidiary of continental Airlines operating from 1993-1995. Continental Lite operated several different aircrafts in a fleet originally designed for normal Continental flights. These planes were stripped of their first class and replaces with all coach seating. Continental was never able to get off of the ground with this subsidiary because it could not reach the economies of scale that low-cost airlines like Southwest could. Southwest’s strategy of focusing entirely on the low-cost segment of customers worked well for them because that was their niche. Continental was trying to serve too many niches and it ultimately failed. Time magazine reported in February 1997 that Continental Airlines lost between 150 million to 300 million dollars on the short lived subsidiary Continental …show more content…
Porter scratches at the notion of “if it’s not broken, don’t try to fix it.” Often times, companies become paranoid that they are not doing enough to stay ahead of the competition, even though they may be the best at what they do. Referring back to the example of Continental Lite, Continental Airlines gave itself a larger dollar loss and a larger brand embarrassment than any of its competitors could have given it in a three year span of time. If your strategy is not broken, do not change your