Defining the objective, scope, and advantage requires trade-offs, which Porter identified as fundamental to strategy. If a firm chooses to pursue growth or size, it must accept that profitability will take a back seat. If it chooses to serve institutional clients, it may ignore retail customers. If the value proposition is lower prices, the company will not be able to compete on, for example, fashion or fit. Finally, if the advantage comes from scale economies, the firm will not be able to accommodate idiosyncratic customer needs. Such trade-offs are what distinguish individual companies strategically.Harvard Business Review, April 2008, p. 85.
Invention of a new business model usually breaks through an "unavoidable" trade-off. For example, Google and Amazon.com found ways to get around the scale vs. customization trade-off. Hotel chains solved institutional vs retail, and etc. Companies that define themselves as a trade-off maintainer are prone to disruptions from their more innovative peers.
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