"Built to Last".

Essay by parizj1 September 2003

download word file, 3 pages 3.0

Strategy is a deliberate search for a plan of action that will develop a business's competitive advantage and compound it. For any company, the search is an iterative process that begins with recognition of where you are and what you have now. Your most dangerous competitors are those that are most like you. The differences between you and your competitors are the basis of your advantage. If you are in business and are self-supporting, you already have some kind of competitive advantage, no matter how small or subtle. Otherwise, you would have gradually lost customers faster than you gained them. The objective is to enlarge the scope of your advantage, which can happen only at someone else's expense.

Ultimately, a company's profitability depends on three elements: Value Creation, Internal Operations, and Competitive Advantage. Profit will be higher, the higher the company's value-creation ability, the more efficient its internal operations, and the greater its competitive advantage.

Companies must not only be able to create high absolute value but also high value relative to competitors at a sufficiently lower cost. Competitive advantage is a company's ability to perform in one or more ways that competitors cannot or will not match. Companies strive to build sustainable competitive advantages. Those that succeed deliver high customer value and satisfaction, which in most cases lead to high repeat purchases that lead to a higher company profit. A sustainable competitive advantage can and usually is comprised of key resources that are specific to a particular firm. By focusing on certain attributes that are key to a firms existence, a properly executed marketing strategy will lead to a competitive advantage that will allow for a firm to achieve long term profitability. Competitive advantage is but only one characteristic of a core competence. Core competence is a strategic concept...