STRATEGIC MANAGEMENT Essay Example | Topics and Well Written Essays - 3000 words

STRATEGIC MANAGEMENT - Essay ExampleA business is give tongue to to have competitive advantage when it is qualified to utilize its resources as well as competencies to generate a value-creating strategy that its competitors find difficult to copy for their business (Fitzroy and Hulbert, 2005, p. 201). Competitive advantage is the influential designer of a firm that in turn convinces the potential customers to buy its products or choose its services rather than its competitors. Hill and Jones (2009, p. 74) argued that firm can be said to have attained competitive advantage when its profitability is greater than the average profitability of all companies in the industry and this become sustain suitable when the firm is able to maintain preceding(prenominal) average profitability over a number of years. Fierce competition among firms resulted in varying levels of performance as individual firms whitethorn choose to pursue different objectives and strategies to make increased profit s, sales growth, better market sh be, and cash flow and so on. Strategy has got significant stance in the competitive business landscape and that has become the cornerstone to achieve competitive advantage. Successful firms are those that demonstrate long-term advantage over its competitors with their ability to do its core business activities better than how its rivals do in the market. As firms are highly instructioning on achieving competitive advantage, they are attempting to find the best panache to beat itself against its rivals by using and implementing business-level strategies. Business-level strategy is the plan of action that managers adopt certain methods and ways to effectively use companys resources and distinctive competences to gain competitive advantage over its counterparts in the market (Hill and Jones, 2011, p.119). Michael Porter, often credited as father of fresh business strategy field, has profoundly impacted modern thoughts of management and business str ategies through his works competitive advantage. He wrote that competitive advantage is at the heart of any business strategy and it is highly important for a firm to make a choice about the types of competitive advantage if it seeks to attain competitive advantage (Porter, 2008, p. 12). Michael Porter argued that firms, no liaison they operate nationally or internationally, face an issue of strategic choice in relation to generic strategy. The basic generic strategy described by Michael Porter multiform competing either on the basis of low-cost strategy or product differentiation strategy. He argued that a companys position in its concerned industry can be determined by its competitive advantage and its competitive scope (Gilles, 1996, p. 214). He suggested that each of the generic strategies involved a basically distinctive route to achieving competitive advantage and he recommended a choice for type of competitive advantage a firm whitethorn consider for the strategic target. M ichael Porter illustrated the combination of competitive advantage and competitive scope through a two-by-two strategy choice matrix as illustrated below. The above depiction of the generic strategy illustrates that cost leadership and differentiation strategies pursue competitive advantage in quite a broader range of industry areas whereas focus strategies tend to vary largely from industry to industry since it represents narrow market segments. Since there are different strategies to achieve competitive advantage and all their routes are different from each other, it is very important that a firm should take a choice among them in order to see and implement the best seize strategy for the firm. Michael Porter stressed