What Is Strategy – and Does It Matter? Research Paper Example

Competitive advantage refers to an advantage that is gained over competitors through offering consumers a greater value, either through lower process or facilitating the provision of greater benefits and service in order to justify the higher prices. Through competitive advantage, a company manages to operate in a manner that is more efficient while at the same time ensuring that it provides products of higher quality compared to those of competing companies. Thus, such a company’s production system brings in both operational and profitability benefits.

A business that is located more strategically as compared to rival companies has a competitive advantage over these companies. If a company is better placed to produce higher quality goods while maintaining operational efficiency, then it has a competitive advantage over other companies since it enjoys a bigger market share compared to these companies. According to Mintzberg (1990), competitive advantage means having differentiation advantage, lower costs or a successful focus strategy.

Strategy refers to a carefully thought-out plan of action that is both sustainable and compatible with the achievement of the competitive advantage goals. Mintzberg, Ahlstrand & Lampel (2005) say there are ten schools of thought relating to strategy. Three among these include strategy as design, strategy as planning and strategy as positioning.

As design, strategy purposes to fit the organizational capability with the environmental opportunity (White, 2004). This school is strongly linked to the SWOT approach as well as the case studies that were first proposed at the Harvard Business School. The strategy that is chosen is one that provides the best organizational design or the best fit.

As planning, the core aim of strategy is simply ‘to plan’ in order to ensure that resources are allocated in order for the chosen goals to be achieved with a specific time-frame (Whittington, 1993).

As positioning, strategy makes it easy for the appropriate industry, sector as well as the best market segments to be chosen, with the focus being put on value-adding activities (Mintzberg, 1990).

References

Mintzberg, H. (1990). The Design School: Reconsidering the Basic Premises of Strategic Management, Strategic Management Journal 11(1) 171-195.

Mintzberg, H., Ahlstrand, B., & Lampel, J. (2005). Strategy Safari: A Guided Tour through the Wilds of Strategic Management. New York: Free Press.

White, C., (2004). Strategic Management, New York: MacMillan.

Whittington, R. (1993). What is Strategy – and Does it Matter? Routledge: London.