Benefits of Strategic Management

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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, seemingly unique differences among firms in the same industry will quickly vanish, competing firms will adopt or purchase similar resources. Resource-based view takes the approach that a firm¡¯s resources are more important than industry structure in getting and keeping competitive...
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