Strategic Management: The Key to Competitive Advantage

Strategic management is comprised of various business strategies, which can be combined to utilize profits and gain the upper hand in the business world. These strategies include global strategies such as expansion/location strategies and international strategies in addition to internal strategies such as corporate strategies. Each of these strategies is a key component to gaining a competitive advantage in a particular industry. Of course, many professionals have varying opinions. The article "What is Strategy" by Michael Porter contemplates the core concepts behind strategy. He points out that there are three sources from which strategic positions surface: the "variety-based positioning", the "needs-based positioning", and "access-based positioning." Porter also identifies two main types of imitation: responding and straddling. He uses the example of Southwest Airlines and Continental Lite to illustrate the point of trading off certain areas of a business in order to maintain a competitive advantage. Additionally, he brings up the "fit" of the activities and the company. According to Porter, improving effectiveness of operation is not a strategy.

Competitive advantage consists of four major superiority building blocks including: quality, customer responsiveness, innovation, and efficiency. Superior quality includes quality design, reliability, durability, and image. When people think of a product or services, they think in these terms. For example, when people are on the market for a vehicle, many of them would pick a Nissan (or other foreign car) over a Ford. Nissans and other foreign cars typically have a reputation of a high quality, up-to-date design, they run forever, you can hit many a curb and the vehicle is usually still in tact, and consumers associate these vehicles with a high-quality image.