Building a competitive strategy is about how companies outperform their competitors in generating profits by satisfying the same consumer needs and wants.
There are many businesses around us. Some target the same market. They compete directly in satisfying consumer needs and wants. And, their products replace each other. So, when consumers do not like the product of a company, they will switch to a competitor’s product.
Now, let’s say, you are running a business.
Being successful in the market requires an effective competitive strategy to win the competition. When successful, your company generates above-average profitability by gaining a competitive advantage.
However, due to dynamic competition and market demand, competitive advantage may last only temporary. Competitors may develop superior competitive strategies and eventually outperform your company.
For this reason, your company should adapt the strategy. Thus, it remains relevant and effective in dealing with the changing business environment. And, if your company is able to maintain a superior position over time, that is what we call sustainable competitive advantage.
How does your business successfully compete and gain a competitive advantage? Michael Porter provides a basic framework, known as generic strategy. It tells us how companies compete, in what dimensions.
Then, your …