Now dont get me wrong, I think business has profited a great deal from the thinking of Michael Porter. He has brought more to our understanding of the value chain and competition than many other writers. But recently Ive heard lots of praise for his new work, kind of a redefinition of strategy. In an article by Richard M Hodgetts ("A conversation with Michael E. Porter: A significant extension toward operational improvement and positioning") in the journal Organizational Dynamics (Summer 1999) the new ideas of Porter were discussed.
I dont know, but it seems like there isnt much new here, and most of it has been in marketing for a very long time. For example, he talks about "variety positioning" which he describes through the following example: Dell is a good example. Many companies thought in terms of the high end and the low end, but Dell found that if it addressed the mid-range where customers were reasonably knowledgeable and the service component was modest, then the whole direct sale model became feasible. Sounds like basic old segmentation to me.
Then he has needs based positioning. But he appears to add a new twist. While the marketing literature has always advocated segmentation of customers with different needs, his theory "stresses that a customer segment alone is not enough to support positioning. The value chain that best serves the segment must also be different." Wow, does that mean that we need to think about company analysis as well when positioning a product? Well, isnt that what the 3Cs are all about, positioning based on understanding segments, the company and the competition.
Then he has access-based positioning, which "focuses on delineating customer groups that are accessible in different ways. For example, Carmike Cinemas operates movie theaters in cities and towns with populations under 200,000. Operating efficiently in these locations requires a different configuration of activities than in urban areas, and Carmike has honed these by specialization. " What? You need to think about the likelihood that segmentation might be based on accessibility, or perhaps accessibility is a descriptor of who is in a segment? Again, whats new here other than some fancy new words to dress up ideas that have been around for years?
Well, as you can see Im not a big fan of dressing up old ideas with fancy words and passing them off as new, especially when the old ideas are from marketing and theyre spun into new concepts to sell books. I think Michael Porter can do much better than this.
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