Title: Making Strategic Trade-offs - Institute For Strategy And Competitiveness - Harvard Business School
Headings: Making Strategic Trade-offs
Making Strategic Trade-offs
IKEA vs. Traditional Furniture Retailers
IKEA, Sweden
Choosing what not to do
Why do Trade-offs arise?

Content: Simply put, a trade-off means that more of one thing necessitates less of another. An airline can choose to serve meals—adding cost and slowing turnaround time at the gate—or it can choose not to, but it cannot do both without bearing major inefficiencies. Why do Trade-offs arise? Trade-offs arise for a number of reasons. Porter highlights three. First, product features may be incompatible. That is, the product that best meets one set of needs performs poorly in addressing others. Second, there may be trade-offs in activities themselves. In other words, the configuration of activities that best delivers one kind of value cannot equally well deliver another. Another source of trade-offs is inconsistencies in image or reputation.