Business Strategies for a competitive advantage

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Information about Business Strategies for a competitive advantage
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Published on April 6, 2014

Author: CaramellaAmore

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Management Information System

Business Strategies for a Competitive Advantage Korina Y. Dorado BSHM II- 1d

→ also known as an enterprise or a firm, is an organization involved in the trade of goods, services, or both to consumers. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning. → An organization or economic system where goods and services are exchanged for one another or for money.

→a careful plan or method for achieving a particular goal usually over a long period of time →the skill of making or carrying out plans to achieve a goal

Business Strategies for a Competitive Advantage → Business strategy is all about competitive advantage. Businesses need strategies in order to ensure that resources are allocated in the most effective way. Many studies of strategies and a lot literature have been carried out that outline the importance of strategies in managing the businesses successfully.

Henry Mintzberg According to him, business strategies could follow one of three modes: •planning, •entrepreneurial, and •adaptive mode. →He argues that the right choice depends on contingency variables such as the size and age of the organization and the power of key decision makers.

→ The main objective is to outline and discuss the relevant issues and challenges from a theoretical viewpoint related with the possible strategy formulation of companies in order to achieve a competitive advantage in a market. Therefore, the primary objectives of this study consist on the theoretical frames of strategies for achieving the competitive advantage, and considering the ways of implementing them in companies worldwide.

→ Carefully evaluate established or emerging competitors in the market to identify their strengths. → Consider their weaknesses and what opportunities this creates for a new company to potentially establish a foothold in the market by addressing those gaps. →Also evaluate companies that have established a leadership position in other markets for ideas and examples of how competitive advantages can effectively be developed. → Review what is known about the competitive landscape to understand factors in the external environment that may be a source of competitive advantage.

→ Analyst Reports – If players in the competitive landscape are public, carefully review analyst reports for clues regarding a company’s core assets, strengths, and sources of competitive advantage. These publications may also provide information about the chosen business strategies of public companies. → Personal Networks – Network with individuals in the field to gain insight into the competitive advantages and supporting business strategies that have been chosen by these companies, how well their strategies support their competitive advantages, and any difficulties they have encountered along the way.

→ Perform a detailed assessment of the company’s own strengths, weaknesses, and assets. Think about which ones potentially can be developed into competitive advantages, taking into account important internal and external factors (such as the availability of time, money, and necessary connections). →Evaluate how the company’s competitive advantages align with the most urgent and important needs of customers in the market, as well as the strengths and weaknesses of competitors.

→ Involve key members of the company in this assessment to make sure nothing is overlooked and multiple perspectives are considered. Be honest about which competitive advantages are truly feasible, sustainable, and substantial enough to differentiate the company. Validate the assessment with an outside expert or advisor if additional objectivity is required.

→ Articulate the most promising competitive advantages that have been identified in a concise statement of competitive advantage. This statement should convey in one or two sentences what the company does, for whom it does this, how this uniquely solves an urgent need in the market, and why competitors cannot imitate it. Many companies have competitive advantages, but few can clearly and explicitly articulate them. A defined statement of competitive advantage helps the company more effectively persuade potential investors about its ability to capture the value created by its products and ultimately position itself in the market and convincingly demonstrate to customers why it is a more valuable alternative than the competition. Keep in mind that the statement must present a distinctive advantage that cannot easily be replicated by others and also can be demonstrated in concrete terms. → it is essential to involve all key members of the team in the development of the statement of competitive advantage.

→ Based on the definition of its competitive advantages, determine the fundamental business strategies that make sense to pursue. Start by eliminating strategies that are not applicable. Then consider which of the remaining strategies make the best match based on the business itself, the needs of the market, and the value propositions the company is trying to demonstrate to its stakeholders. → Make this decision with the management team. Involve the board of directors for additional expertise and to validate the approach. Recognize that this is just one aspect of a holistic business strategy, and invest time and energy in making sure the rest of the strategy lines up around the fundamental business approach that has been chosen (and vice versa).

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