Productivity Strategies

Patrick McConnell

This chapter considers productivity strategies, which assume that a firm’s existing business model is operating fairly successfully but can be tweaked to make better use of existing resources. The chapter describes the risks in such strategies, in particular the risk that the firm may be unable to execute such a strategy, because of the complexities involved and/or the impact on “business as usual”. The failure to execute a productivity strategy is doubly costly, first because of the costs wasted in failing to execute the strategy and, second, the expense involved in attempting to undertake a similar strategy in future. This is particularly applicable in the technology strategies described in this chapter.

PRODUCTIVITY STRATEGIES

Chapter 4 described four main types of strategy, which are used to “actively” position a firm within the context of a generic strategy (Porter 1980), one of which was a so-called productivity strategy. Such a strategy aims to position the firm to make better use of existing resources and hence increase profitability, through initiatives to deliver increased value to existing or new customers at lower overall costs, by:

• • technology: improving