For a nonprofit, there is no directly comparable metric, so you’ve got to create one. A major challenge for every nonprofit is to define its goal or goals in terms of the social benefits it seeks to create. And then it must develop a value metric that looks at the results achieved versus the costs required to achieve them.

What does it mean to stake out a distinctive competitive position? The obvious answer lies in the unique value proposition a company offers its customers. This, in fact, is the first test of strategy. But Porter’s second test is neither obvious nor intuitive. A distinctive value proposition will translate into a meaningful strategy only if the best

How can you position yourself in relation to the five forces? Can you find a position where the forces are weakest? Can you exploit industry change? Can you reshape structure in your favor?

The goal of strategy is to earn superior returns on the resources you deploy, and that is best measured by return on invested capital.

The first test of a strategy is whether your value proposition is different from your rivals. If you are trying to serve the same customers and meet the same needs and sell at the same relative price, then by Porter’s definition, you don’t have a strategy.

Early in his career, Porter identified a set of generic strategies—focus, differentiation, and cost leadership—that quickly became one of the most widely used tools for thinking about key strategic choices. Each of the three reflects the most basic level of consistency that every effective strategy must have. Focus refers to the breadth or narrowne

Analyze recent and likely future changes for each force.

Second, deepen your strategic position, don’t broaden it.

Rivalry can take a variety of forms: price competition, advertising, new product introductions, and increased customer service.