Within an industry, firms must choose a "generic strategy"—either cost leadership, differentiation, or a narrow focus —to stand out. 3. The Power of Trade-offs
At its core, a successful strategy is a calculus of value creation and capture. To truly outperform, firms must move beyond operational efficiency—doing things well—and focus on strategic positioning —doing things differently. 1. The Wedge: Value Creation vs. Value Capture Economics of Strategy
A common strategic trap is trying to be "all things to all people." Economic logic dictates that sustainable positioning requires . By choosing what not to do, a firm optimizes its activities to reinforce one another. For example, a low-cost carrier cannot offer luxury lounges without undermining its entire economic model of efficiency and low overhead . 4. Game Theory and Competitor Response Within an industry, firms must choose a "generic