Ch6 and 7

the difficulty of strategy execution and the tools managers can use to make strategy happen. As the title

Competitive advantage exists when a firm has strategy, product or an attribute that makes the firm capable of delivering similar benefit to that of competitors at a cheaper cost. Having competitive advantage is not enough the company should be capable of sustaining that particular competitive advantage for a longer period of time.

•Profitable: one of the key criterions for selecting the above competitive advantages is that the company can introduce them profitably.

Chandler (1977) believes strategy is about using the necessary recourses so the organizations are able to carry out their long-term goals and aims. Which relates to Johnson (1987, pp. 4-5) who states, “Strategic decisions occur at many levels of managerial activity and will be concerned with the long-term direction”.

An example of a competitive advantage: “McDonalds’ competitive advantage is its large number of restaurants, more than double its competitors, making it more convenient for customers than any other fast food restaurant in the world.”

Competitive advantage is the point of power for any organization as it is the point from which an organization can maximize it's profits if it's been planned for it well .

1. What is competitive advantage, and how does it relate to a company’s business model?

From many of these examples and articles, we can gather much information over the relationship between innovation and strategic management. Although, some areas may not be proven in its fullest capacity, there are undoubtedly ways that innovation improved business operations and practices, which can be seen in examples such as Apple, Microsoft, Dominos, and Samsung. On the other hand, not every business incorporating innovation is a success story. In the dynamic days we find ourselves in today, business and organizations are digging deeper into the wells of innovation. We have all come to enjoy the benefits and I am not sure of anyone that would want to

Alfred Chandler(1963) defines strategy as ‘ the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’. And Michael porter(1996) sees it as ‘Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value’.

In the book “Good Strategy and Bad Strategy”, Richard Rumelt illustrates examples of success and failure of business management to explain the true meaning of the strategy, and tells companies how to develop a correct strategy and adhere to core of management strategy. He also emphasizes the central role of strategic management as to remind the readers to understand the huge difference between a good strategy and bad strategy. This book has three sections: good and bad strategy, sources of power, and thinking like a strategist. I will be evaluating strengths and weaknesses under these topics. After finish reading the book, I had gained a better understanding of what a good strategy means to the success of a company. According to Rumelt, a good strategy is coherent, where companies pursue multiple objectives that are connected with each other. Rumelt points out that a good strategy consists of three elements: diagnosis, guiding policy, and coherent action. (71) First, diagnosis means to define the obstacles and challenges that the companies are facing, and guidelines help the people to overcome the obstacles. Lastly, coherent action is the activities or actions that company did to be consistent with its guiding policy. Today, many of us lost the focus of the strategy, which results in the downward of businesses and organizations. Rumelt has defined the strategy as acknowledging the main problems and take coherent action to overcome the problems. Moreover, he illustrates

Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).

In order to achieve competitive advantage, a firm must perform one or more value-creating activity that is more superior compared to other competitors. Superior value is created through lower costs or superior benefits to the buyers.

convenience of location’ (Queensland government, 2016). As Resource-based view (RBV) theory holds that the competitive advantage and superior performance

Johnson, Wittington, Scholes, Angwin and Regnér (2014, p. 3) defines strategy as ‘the long-term direction of an organisation’.

exists when the firm is able to deliver the same benefits as competitors but at a