Strategic Management For Competitive Advantage

Fundamental Discussion

Discuss about the Strategic Management for Competitive Advantage.

Competition refers to a specific act of striving against another force with the aim of establishing market dominance, achieving a significant portion of reward, or attaining the prearranged goals for facilitating the practical survival. The term competition is utilised widely in different fields, where the marketing perspective suggests the factor as a rivalry between two individual sellers for gaining a more comprehensive customer base in a market (David & David, 2016). Concerning the understanding related to competition, competitive advantage, as explained by Thompson, et al., (2013) refers to a unique position developed by an organization within a particular market for outperforming its key market competitors consistently. Furthermore, the authors reveal that competitive advantage must need to be established by a firm in a sustainable manner via generating a proper value and position, which cannot be imitated by other companies from the relevant market. There is a sustainable level of gap between competitive advantage and sustainable competitive advantage, as the former indicates gaining benefits for a short period where the later deals with long-term benefit (Thompson, et al., 2013). Apart from that, a long-term competitive advantage cannot be replicated easily by other firms. There is a wide range of discussions and arguments present in the marketing context regarding the significant number of challenges experienced by the companies to maintain competitive advantage even in the midst of strict competition. Therefore, this particular essay is formed with the intention of raising momentous knowledge by assessing the critical arguments and experiences from various market professionals regarding the presence of competitive advantage.

According to Baker and Sinkula (2015), a competitive advantage is maintained by an organization over the other market players via employing apposite strategies having the capabilities to exploit the internal strengths and respond adequately to the market opportunities. Most importantly, the identified strategies should need to be competent enough to neutralise external threats and avoid internal weaknesses (Thompson, et al., 2013).  Sinkula (2015) further mentioned that competitive advantage can be obtained by the firm in a proficiently if it acquires a valuable resource continuously causing the improvement of operational usefulness and competence in a manner that the competing enterprises simply cannot imitate. Concerning the specific scenario, the study conducted by Bharadwaj and Varadarajan (2015) reflects resources possessed by the firm varies time to time, as these can be tangible or intangible and possibly linked with the business semi-permanently. Various ways are offering a competitive advantage to a company, which can be discussed comprehensively after investigating the fundamental background of the chosen subject.

Numerous firms are operating within the industry where not all of them enjoy a leading advantage or superiority over the others. The leading position in the market availed by the global organizations are considerably contributed by their practical long-running financial returns and superiority of business strategy within the specific industry. This is the particular scenario, which is referred to as enjoying a competitive advantage over the key rivals into the market (Baker & Sinkula, 2015). Therefore, it is often a challenging factor for the firms related to the building of competitive advantage. At the same time, countless arguments are raised by the scholars and professional over the course of time involving the identified concern. Citing the information obtained from the arguments developed by Wagner and Holenbeck (2014), an organization must need to put pressure on two individual themes. Firstly, the firm must need to configure its entire operational structure to produce uniqueness and value for its target market. Secondly, the formation of competitive advantage depends on fully-fledged activities adopted and practiced by the firm. From the first perspective, the business must need to recognise the particular area where it requires creating value, which cannot be duplicated by others (Bharadwaj, Varadarajan, & Fahy, 2015). Hence, the first perspective profoundly signifies the need of adding value to the operations or activities conducted by the organization helping it to shape up every aspect of the system more precisely. On the other hand, the full-fledged operations of the firm suggest harmonising the operations as part of production to finance or from marketing to logistics (Wagner & Hollenbeck, 2014). Barney (2012) has indicated the essence of generating competitive advantage provides an integrated set of choices to the firm for ensuring the differentiation with the industry rivals. Therefore, the background information suggests the continuous evolution of managerial activities and approaches of different organizations to analyse the full range of activities for appending values to the overall business.

Background of the Topic

From the perspective of modern day business environment, ecommerce has become a fundamentally dominant factor in the marketing appreciably shaping up the approaches and policies adopted by the firm. Apparently, ecommerce is forcing the companies to embrace a new set of practices for expanding the market in which they operate. Based on the findings developed by David and David (2016), market expansion policies elaborated by the enterprises highly contributes to the construction of competitive advantage by including various tactics to attract new customers and retain the existing customer base. The company importantly achieves the identified aim via tailoring its products and services according to the changing needs and requirements of the market customers (Barney, 2012). Thompson, et al., (2013) not only indicate the need for modifying the products or services by the firms but also encourage them to restructure various chief business processes and delivery of goods and services in a useful manner. However, different arguments pointing out the absence of competitive advantage, as many companies adopting the e-business model are still in their investment and brand-rebuilding phrase despite the dynamic and sustained growth of e-commerce (Sahay, 2013). Baker and Sinkula (2015) have explicitly prioritised the e-business activities to measure the application of competitive advantage. The particular study reveals that the rapid number of electronic businesses in the modern day is increasingly accentuating on the factors like visual attractiveness and ease of use associated with their online websites as the primary method for enhancing the customer base. The underlying reason for shifting the focus to the identified areas is strengthening the customer base for bolstering the revenue and profitability of the firm. However, the companies require re-evaluating their existing strategies for assessing and determining the availability of up-to-dated techniques offering the business a clear path to profitability (Darnall & Milstein, 2014).

According to Sahay (2013), competitiveness of an entire nation depends heavily on the core capabilities of the industry from the field of innovation and improvement. Because of the involvement of huge amount of pressure and challenge from the external business environment, companies are forced to gain competitive advantage (Campbell, Coff, & Kryscynski, 2012). By analysing the fact critically, it can be proposed that a considerable amount of benefit is availed by the countries due to the involvement of healthy domestic rivals, demanding regional customers, and competitive local suppliers.

In the ear of dynamic competition in the global atmosphere, increasing the degree of importance is provided to the companies along with the respective countries at the same time. Considering such scenario, Campbell, Coff, and Kryscynski (2012) has argued that the basis of competition has shifted more towards the assimilation of knowledge, as the firms should need to emphasis on enhancing its skills and competence through the operations in a mean to gain competitive advantage. Another study has come up with the fact that the level of competitive advantage is maximised by devising and maintaining highly localised process (Schilke, 2014). Additionally, Schilke (2014) has designated the differences between culture, histories, national values, and economic structures, which are the crucial factors supporting the attainment of competitive for the companies.

Key Observations and Arguments

All of these findings lead to the fact that firms from different industries go through some significant hurdles to developing competitive advantage, which exists for a certain time depending on the capability of the enterprise to adopt accordingly.

Some other relevant facts are pointed out by the study developed by Goodman (2013) stating that marketing strategies are the initially elaborated by the organizations for seeking competitive advantage from the target market. The adequate information from the target market helps companies to tailor their products and services as part of the preliminary process. In this particular situation, the application of a marketing mix can be noted significantly providing the proper business insight related to the product, place, price, and promotion driving the elevation of distribution and supply chain functions (Goodman, 2013). From the analysis of these facts, it can be primarily determined that a unique mix of the proposed elements of a marketing mix helps the organization in a given industry to enrich its operations and revenues in the target market while allowing it to compete effectively promoting the profitability and sustainability.

Conclusion

From the overall consideration of various arguments formed by numerous scholars and professionals, it can be clearly signified that competitive advantage will meet its end in near future due to the emergence of ecommerce. Experts have pointed out the necessary requirement for the firms to develop its online presence in the modern day business environment for the sake of making profits. These companies need to consider some serious factors like increasing customer bargaining power, lower barriers to market entry, growing number of competition, and high investment in the mass marketing to fabricate and sustain competitive advantage. Thus, the combination of the factors is continuously creating barriers for the firms to generate such benefits over the other market players.

References

Baker, W. E., & Sinkula, J. M. (2015). Maintaining Competitive Advantage Through Organizational Unlearning. In Proceedings of the 1999 Academy of Marketing Science (AMS) Annual Conference (pp. 206-209). Springer International Publishing.

Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resourceâ€Âbased theory. Journal of Supply Chain Management, 48(2), 3-6.

Bharadwaj, S. G., Varadarajan, P. R., & Fahy, J. (2015). Sustainable competitive advantage in service industries: a conceptual model and research propositions. In Proceedings of the 1992 Academy of Marketing Science (AMS) annual conference, Springer International Publishing (pp. 441-443).

Campbell, B. A., Coff, R., & Kryscynski, D. (2012). Rethinking sustained competitive advantage from human capital. Academy of Management Review, 37(3), 376-395.

Darnall, N., & Milstein, M. B. (2014). Damaí Lovina Villas: can eco-standards and certification create competitive advantage for a luxury resort?. Case Research Journal, 3, 1-20.

David, F., & David, F. R. (2016). Strategic Management: A Competitive Advantage Approach, Concepts and Cases.

Goodman, K. W. (2013). Joint ventures and competitive advantage measured through performance and innovation: Resource dependence and resource-based perspective (Doctoral dissertation, Argosy University/SeaTtle).

Sahay, A. (2013). A Customer Oriented Approach to Identifying Competitive Advantage (No. WP2013-05-08). Indian Institute of Management Ahmedabad, Research and Publication Department.

Schilke, O. (2014). On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism. Strategic Management Journal, 35(2), 179-203.

Thompson, A., Peteraf, M., Gamble, J., & Strictland, A. J. (2013). Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases Referenced from: https://w3. salemstate. edu/~ edesmarais/courses/470general/semesters/Archived% 20semesters.

Thompson, A., Peteraf, M., Gamble, J., Strickland III, A. J., & Jain, A. K. (2013). Crafting & Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases. McGraw-Hill Education.

Wagner III, J. A., & Hollenbeck, J. R. (2014). Organizational behavior: Securing competitive advantage. Routledge.