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A competitive strategy is a strategy for how an organization will compete in its business. For a small organization in only one line of business or a large organization with little product or market diversification, the competitive strategy describes how the organization will compete in its primary market. For organizations in multiple businesses, each business has its own competitive strategy that defines its competitive advantage, the products or services it will offer, the customers it wants to reach, and so on. When an organization engages in several different businesses, those single businesses that are independent and formulate their own competitive strategies are often called strategic business units (SBUs). * Developing an effective competitive strategy requires an understanding of the organization’s competitive advantage, which is whatever sets it apart from the competition. That distinctive edge comes from the organization’s core competencies. Competitive advantage also can come from the company’s resources—something that the organization has that its competitors don’t. Cost leadership strategy Differentiation strategy. Focus strategy—involves a cost advantage (or “cost focus”) Stuck in the middle Use strategic management to get a sustainable competitive advantage. * Those strategies used by an organization’s various functional departments (marketing, operations, finance/accounting, human resources, and so forth) to support the competitive strategy. * In today’s intensely competitive and chaotic marketplace, organizations are looking for whatever “weapons” they can use to do what they’re in business to do and to achieve their goals. We think six strategic “weapons” are important in today’s environment: customer service, employee skills and loyalty, innovation, quality, social media, and big data. We’ve covered customer service in previous chapters and will discuss employee-related matters in. Now we’ll look at quality, social media, and big
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