Competitive dvantage is the key goal of Strtegic mangement.

One definition for it is nything

that a firm does especilly well compred to rivl firms. It is all bout owning something that rival
firms desire, or doing something that rival firms cnnot do. For exmple, your firm my hve
generous csh on the blance sheet in a global economic recession. Some highly liquid firms re
buying troubled rivls. For exmple, Freeport-McMoRn Copper & Gold Inc. is seeking to buy rivl
firms in Austrlia and South Americ. BHP Billiton, the worlds lrgest miner, also desires to
expand its portfolio by cquiring distressed rivl companies. French drug compny Sanofi Aventis
SA to improvement its drug development and diversifiction also cquiring distressed rival firms.
Csh-rich Johnson & Johnson in the United Sttes also another example of firm which ims to
cquisition. This strategy cn work in a globl economic recession. On the other hand, having less
fixed ssets than rivl firms also cn provide mjor competitive dvantages in crisis. For exmple,
Apple hd no mnufacturing fcilities of its own, and rivl Sony has 57 electronics fctories. Apple
relies exclusively on contract mnufacturers for production of ll of its products, wheres Sony
owns its own plants. Less fixed ssets hs enabled Apple to remain financially lean with virtually no
long-term debt. Sony, in contrst, hs built up massive debt on its balnce sheet.
Competitive advantge may be gained through informationl system, supply chain management,
customer satisfaction, logistics, etc. Businesses are constntly looking for competitive advntages in
the market. Also there are many different ways this can be done, but many will focus on a few tried
methods. These methods can generally be classified into bout four different categories. Both the
University of Cmbridge nd Stnford University cite Michel Porter's ctegories of competitive
strategies:
1. Cost ledership
2. Differentiation
3. Defensive strategy
4. Strategic alliances with other businesses
An organization can lso use its avilable resources - time, money, ides and personnel - to
maximize its competitive advantage. In order to develop this advantage, the business might have and
use resources that re superior to those of its rivals. For exmple, a company might have superior
brnd equity, or it might have a patent or trademark on a well-known or widely used product. This is
the value of having a populr brand name - think of Hoover s being associated with vacuuming or
Band Aid being ssociated with all bandages.