The paper 'Strategic Management and Sustained Competitive Advantage' is a great example of a Management Essay. If a company achieves a higher than average profit margin, as compared to other players in the industry, it is said to have a competitive advantage over them. This is the purpose of most business strategies. This advantage can be of two types; price and differentiation advantages. A price advantage means that the firm is able to supply the same goods at a lower cost to its customers while a differentiation advantage means that certain benefits accrue to the customer which is not provided for by the competition.
Together, these provide a positional advantage to the firm. Resource-Based View vs. Competitive Positioning; a Journal Review The resource-based strategy relies on superiority of wherewithal as well as the firm’ s capabilities, which create a value-added benefit to the consumer. These benefits are very specific to the company and are difficult to replicate. They include such items as patents, trademarks, brand equity, company standing, etc. (Porter, 1985). According to the Western New England Law Review, resource-based strategy embodies resources that are specific to that firm and should be precious, unusual, matchless, non-tradable (or traded in inadequate dynamic markets), and non-replaceable, in order to produce Ricardian rents.
The bedrock advantage of this strategy is the possession and use of these various assets shrewdly to create a niche that cannot be imitated or duplicated by competitors (Eunni, 2009). The competitive positioning theory, on the other hand, fosters the notion that maximizing earnings in the long term, and maintaining the upper hand with competitors, is the main purpose of commerce. The industrial/organization perspective is the bedrock of this view which takes the place of the firm in the external marketplace as decisive (Porter, 1981). The journal of supply chain management views it as an existing economic strategy that concerns the way the firm is viewed and operated.
According to Conner (1991), an ideal neoclassical model of competition has the company as a production tool that converts the input into output although the process of how this takes place is not outlined. There are certain assumptions made about the stated firm, viz, that all companies in that field are similar, and that a prolonged perch as the market leader in profit-making is not sustainable for just one player.
The spotlight of the model is actually on the market in which the company does business and not on the individual company at all. This focus is illustrated by the structure-conduct-performance (S-C-P) method that is found in the Organization Theory. The main areas of focus in this theory are the structure of the industry, what outcomes of barriers to ingress would cause the size of the company and the domination in prices.
The argument advanced is that there are a cause and effect between market extent and nature of competition versus company behavior vis prices, marketing, etc, all lending credence to financial performance Ramsay (2001). The European Journal of Sciences has a different take, where Raduan et al, (2009) focus on the perspectives of different aspects of management. It proposes that a firm’ s competitive edge stems from its in-house assets, rather than external positioning. This means that instead of simply assessing the competition and the external market forces, the firm also has to evaluate its internal resources and capabilities (Barney, 1995).
The resource-based view has the ability to take the firm to eventual market domination (Ainuddin et al. , 2007).
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