Choosing What Not To Do

From Michael E. Porter, “What Is Strategy?” (Harvard Business Review, November-December 1996, pp. 61-78), in Section III, “A Sustainable Strategic Position Requires Trade-offs.” The line closes Section III on p. 69, in the paragraph: “Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do. Without trade-offs, there would be no need for choice and thus no need for strategy.”

Porter has spent the section arguing that a strategic position only survives when its rejected options structurally cannot coexist with its chosen ones. Southwest’s 15-minute gate turnarounds cannot coexist with meals, assigned seats, and interline baggage transfers. Neutrogena’s pH-balanced soap chemistry cannot coexist with the deodorants and softeners that broaden a mass-market line. When there are no such incompatibilities, an imitator can graft the rejected feature back on and straddle both positions, the failure Porter walks through using Continental Lite, which Continental ran alongside its full-service business until the resulting frequent-flier and travel-agent compromises sank both. Refusal alone is reversible; refusal tied to an activity that physically rules the rejected option out blocks imitators.

The article carries an earlier “essence of strategy” formulation in Section II, on p. 64, that points at the positive side: strategy is performing activities differently from rivals, or performing different activities altogether. Read together, the two formulations describe the activity set a company builds and the activity set it cannot add without breaking the first.