Quotes About Strategy

Betting and gambling are suitable for discrete events but not for continuous processes. If you introduce the behavioral characteristics of betting or gambling into a continuous process, you are leaving yourself open to enormous losses.

In a continuous process, the participant gets to continuously make and remake decisions that can affect how much money he makes or loses. On the other hand, a discrete event (e.g., a football game, roulette, blackjack, or other casino game) has a defined ending point, which is characteristic of external losses.

gambling creates risk while investing/speculating assumes and manages risk that already exists.

The next step in decision making is establishing controls, i.e., the exit criteria that will take you out of the market either at a profit or loss.

Drucker's observation means that the controls should be consistent with the strategy, not that they should be selected after the strategy is implemented.

You must pick the loss side first. Why? Otherwise, after you enter the market everything you look at and hear will be skewed in favor of your position.

After you know where you want to get out of the market, then you can ascertain whether and where you are comfortable getting into the market. In contrast to what most people do, your entry point should be a function of the exit point.

Once you specify what price or under what circumstances you would no longer want the position, and specify how much money you are willing to lose, then, and only then, can you start thinking about where to enter the market.

Another reason controls should precede strategy is that, as we learned in chapter 7, you can't calculate the probability of a trade's being profitable; you can only calculate your exposure. So all you can do is manage your losses, not predict profits.

Our intelligence community needs better coordination of operations and exchange of information, and that's why we need an overall director of national intelligence and a national counterterrorism center.

Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows.

When in a superior bargaining position, one should never make the first move.

great legacy starts with a great life, and every great life starts with a great plan.

No matter what business you're in, you can't run in place or someone will pass you by. It doesn't matter how many games you've won.

The first lesson is that you can't lose a war if you have command of the air, and you can't win a war if you haven't.

Spread the diaper in the position of the diamond with you at bat. Then fold second base down to home and set the baby on the pitcher's mound. Put first base and third together, bring up home plate and pin the three together. Of course, in case of rain, you gotta call the game and start all over again.

The only thing that's been a worse flop than the organization of non-violence has been the organization of violence.

In 1970, for example, Walmart was barely a blip on anyone's radar. Today, as the world's most powerful buyer, it is the dominant force in industry after industry. In what must be one of the most honest job titles I've ever seen, the company's chief buyer is called "vice president for international purchase leverage.

For Porter, competitive advantage is not about trouncing rivals, it's about creating superior value. Moreover, the term is both concrete and specific. If you have a real competitive advantage, it means that compared with rivals, you operate at a lower cost, command a premium price, or both.

Growth is another widely embraced goal, along with its sister goal, market share. Like ROS, these fail to account for the capital required to compete in the industry. Too often companies pursue unprofitable growth that never leads to superior return on capital. As Porter notes wryly when he talks to managers, most companies could instantly achieve rapid growth simply by cutting their prices in half.

Porter's solution to this problem requires some courage: the only way to know if you are achieving the ultimate goal of creating economic value is to be brutally honest about the true profits you've earned and all the capital you've committed to the business. Strategy, then, must start not only with the right goal, but also with a commitment to measure performance accurately and honestly.

Just to keep our terminology straight, for Porter strategy always means "competitive strategy" within a business. The business unit, and not the company overall, is the core level of strategy. Corporate strategy refers to the business logic of a multiple-business company.

Only by competing to be unique can an organization achieve sustained, superior performance.

In the oft-told joke, one economist says to another, "Sure, it works in reality. But will it work in theory?" Porter's work endures—and is so widely cited and used—because it works in both realms, theory and practice.