Building Competitive Advantage Through Market Based Management Practices

4273 WordsNov 17, 201118 Pages
Building Competitive Advantage Through Market Based Management Practices In 21st Century Management practices, firms and corporations are constantly seeking the leg-up on the competition to increase profits and long-term value creation. In an increasingly global environment, competition remains stiff if not more competitive than ever before. Representing indirect forces on competitive advantage for companies, globalization and national and international business/trade laws have an increasing impact on competitive measures that firms may take. In Contemporary Management by Jones and George, Competitive Advantage is defined as “the ability of one organization to outperform other organizations because it produces desired goods or…show more content…
A sustained competitive advantage, on the other hand, can last much longer. Business Level Strategies Any successful business ultimately results from business-level strategies that create a competitive advantage over rivals and achieve superior competitive performance within a particular industry (Collin 2004). Moreover, firms who have created a competitive advantage must stabilize their competitive position within the industry or seek to maintain the advantage in which the company has created. They 4 must first decide on: customer needs, or what is to be satisfied; customer groups, or who is to be satisfied; core competencies, or how customer needs are to be satisfied (Porter 1980). Based on these decisions, a firm will determine which strategies they formulate and implement to put a companyʼs business model into a plan of action. Business-Level Strategy deals with decisions and actions pertaining to each business unit in order to make each unit more competitive in its market-place (Collin 2004). These particular business units are in effect part of the “organizational structure” of a firm and part of the “value chain.” The Value Chain The value chain is a basic tool for diagnosing competitive advantage and finding ways to create and sustain it (Porter 1985). The value chain however, can also play an important role in designing organizational structure. According to Jones & George, the organizational structure of an firm is a formal system
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