Competitive Advantage in Strategic Management
A business without strategy is a business without direction. A strategy
without a competitive advantage is a business without a precondition of
success. Managing strategically is to make decisions and implement strategies
that allow an organization to develop and maintain competitive advantage.
Competitive advantage is a concept that motivates strategists to replicate the
strategies that make most successful companies successful. According to this,
we can learn that competitive advantage is a very important concept in
strategic management. Next, I will look deeper into ¡°what¡¯s competitive
advantage¡±.
Competitive advantage is what sets and organization apart. When a firm
sustains profits that exceed the average for its industry, it has something that
other competitors don¡¯t does something better than other firms do, or does
something that others can¡¯t, the firm is said to possess a competitive
advantage over its rivals. The goal of much of business strategy is to achieve a
sustainable competitive advantage. Getting and keeping it is what managing
strategically is all about. It¡¯s tough to do, and getting tougher.1
There are 2 major views of alternative model of superior returns. Industrial
organization (I/O) view and resource-based view. The industrial organization
view focuses on the structural forces within an industry, the competitive
environment of firms and how these influence competitive advantage. The
external environment determines the potential for profits. Firms within the
same industry have similar resources and pursuer similar strategies.
Resources are mobile across firms (because of this, seeming ...