Michael Porter
Strategy is deciding what not to do
Every extra thing you say yes to blurs what people remember you for
"What Is Strategy?", Harvard Business Review, 1996
Do I need what my rivals have? This page is about why a company that wants everything ends up standing out in nothing.
What actually happened?
Southwest Airlines flew short routes point to point. No meals, no assigned seats, no baggage transfers to other airlines, and a fleet of nothing but Boeing 737s. Porter used it as his example of a firm in which every missing thing is what lets another thing work: no meals and no transfers let planes turn round quickly at the gate, and one aircraft type keeps maintenance and scheduling simple. Continental, by contrast, launched Continental Lite to chase low fares while keeping its full-service business running.
Each "no" is paid for by a "yes"
Strategy, he says, is not one good position but a set of activities that reinforce each other. Southwest's choices prop each other up, so a rival who copies one of them does not get the same effect.
A barber who only visits homes, with no shop and no loyalty card, spends all the saved time on the road and on the haircut.
Want both ends and you carry both costs
Continental Lite tried to match Southwest's low fares, but Continental was still a full-service airline: same planes, same booking systems, same staff, pulled two ways at once. That is a trade-off: more of one thing means less of another.
A restaurant wants a cheap quick lunch and a pricey banquet menu. The kitchen and waiters are torn in half.
"My rivals have it, so I need it" is the easy excuse
Each addition looks reasonable: customers ask, rivals offer it. He says managers widen the product line, copy rivals' features and enter new markets this way, and together the additions rub away what made the firm different.
A solid repair shop hears that rivals added car valeting and copies them. Its best mechanic now spends afternoons on the wash bay.
What you refuse is what draws your outline
In his words, the essence of strategy is choosing what not to do. Choose a different set of activities on purpose, and customers can say "for this, go to them". Do a little of everything and they cannot say anything.
"Fast repairs, nothing else" is easier to remember than a price list with twenty services.
How do I use it today?
Where you are: A rival has added a feature or a price tier and you wonder whether to follow, or your own price sits in the middle, neither cheap nor premium, and sells so-so.
Ask first: Would this make the one thing I am best known for easier to do, or harder? What would it push out? Write a "what I won't do" list of at least three, then look at the new item again.
Where it goes wrong: Reading it as "never add anything". A trade-off is worth making when a whole set of activities fits together around it. Without that set, what you give up is just opportunity.
Lines to keep
The essence of strategy is choosing what not to do.
Competitive strategy is about being different.
Each extra yes makes you harder to remember.
Same situation, other people are asking
I keep winning these and I'm more tired every time.We're all fighting hard and nobody in this market is making money.My clever move didn't land. Was the idea wrong?They set the agenda every week and I just respond.Winning is costing too much · all 11 questions →If this one named what you are going through,
send it to someone who needs it, or keep it somewhere you will find it again.