Porter Prize for Leveraging Unique Activities
Fit locks out imitators by creating a chain that is as its strongest link. Fit means that the value or cost of one activity is affected by the way other activities are performed. It creates competitive advantage as well as superior profitability.Companies can gain advantage by adopting any of these forms:
- First-order fit
Basic consistency, where each activity is aligned with the company’s value proposition and each contributes incrementally to its dominant themes.
- Second-order fit
It occurs when activities complement or reinforce each other. There lies a synergy, where the value of each activity is raised by the other.
- Third-order fit
When fit goes beyond the activity of reinforcement then optimization of efforts occur wherein performing one activity makes it possible to eliminate another.