First, th? strat?gic manag?m?nt of an organization ?ntails
thr?? ongoing proc?ss?s: analysis, d?cisions and actions. That is, strat?gic
manag?m?nt is conc?rn?d with th? analysis of strat?gic goals (vision, mission,
and strat?gic obj?ctiv?s) along with th? analysis of th? int?rnal and ?xt?rnal ?nvironm?nt
of th? organization. N?xt, l?ad?rs must mak? strat?gic d?cisions. Th?s? d?cisions,
broadly sp?aking, addr?ss two basic qu?stions: What industri?s should w? comp?t?
in? How should w? comp?t? in thos? industri?s? Th?s? qu?stions also oft?n
involv? an organization’s dom?stic as w?ll as its int?rnational op?rations. And
last ar? th? actions that must b? tak?n. D?cisions ar? of littl? us?, of cours?,
unl?ss th?y ar? act?d on. Firms must tak? th? n?c?ssary actions to impl?m?nt th?ir
strat?gi?s. This r?quir?s l?ad?rs to allocat? th? n?c?ssary r?sourc?s and to d?sign
th? organization to bring th? int?nd?d strat?gi?s to r?ality. As w? will s?? in
th? n?xt s?ction, this is an ongoing, ?volving proc?ss that r?quir?s a gr?at d?al
of int?raction among th?s? thr?? proc?ss?s.
S?cond, th? ?ss?nc? of strat?gic manag?m?nt is th? study of
why som? firms outp?rform oth?rs. Thus, manag?rs n??d to d?t?rmin? how a firm
is to comp?t? so that it can obtain advantag?s that ar? sustainabl? ov?r a l?ngthy
p?riod of tim?. That m?ans focusing on two fundam?ntal qu?stions: How should w?
comp?t? in ord?r to cr?at? comp?titiv? advantag?s in th? mark?tplac?? For ?xampl?,
manag?rs n??d to d?t?rmin? if th? firm should position its?lf as th? low-cost
produc?r, or d?v?lop products and s?rvic?s that ar? uniqu? which will ?nabl? th?
firm to charg? pr?mium pric?s-or som? combination of both. Manag?rs must also
ask how to mak? such advantag?s sustainabl?, inst?ad of highly t?mporary, in th?
mark?tplac?. That is: How can w? cr?at? comp?titiv? advantag?s in th? mark?tplac?
that ar? not only uniqu? and valuabl? but also difficult for comp?titors to
copy or substitut?? Id?as that work ar? almost always copi?d by rivals imm?diat?ly.
In th? 1980s, Am?rican Airlin?s tri?d to ?stablish a comp?titiv? advantag? by
introducing th? fr?qu?nt fly?r program. Within w??ks, all th? airlin?s did th?
sam? thing. Ov?rnight, inst?ad of comp?titiv? advantag?,
fr?qu?nt fly?r programs b?cam? a n?c?ssary tool for comp?titiv?
parity, not comp?titiv? advantag?. Th? chall?ng?, th?r?for?, is to cr?at? comp?titiv?
advantag? that is sustainabl?. Micha?l Port?r argu?s that sustainabl? comp?titiv?
advantag? cannot b? achi?v?d through op?rational ?ff?ctiv?n?ss alon?. Most of
th? popular manag?m?nt innovations of th? last two d?cad?s-total quality,
just-in-tim?, b?nchmarking, busin?ss proc?ss r??ngin??ring, outsourcing all ar?
about op?rational ?ff?ctiv?n?ss. Op?rational ?ff?ctiv?n?ss m?ans p?rforming
similar activiti?s b?tt?r than rivals. ?ach of th?s? is important, but non? l?ad
to sustainabl? comp?titiv? advantag?, for th? simpl? r?ason that ?v?ryon? is
doing th?m. Strat?gy is all about b?ing diff?r?nt from ?v?ryon? ?ls?.
Sustainabl? comp?titiv? advantag? is possibl? only through p?rforming diff?r?nt
activiti?s from rivals or p?rforming similar activiti?s in diff?r?nt ways.
Compani?s such as Wal-Mart, Southw?st Airlin?s, and IK?A hav?
d?v?lop?d uniqu?, int?rnally consist?nt, and difficult to imitat? activity syst?ms
that hav? provid?d th?m with sustain?d comp?titiv? advantag?. A company with a
good strat?gy must mak? cl?ar choic?s about what it wants to accomplish. Trying
to do ?v?rything that your rivals do ?v?ntually l?ads to mutually d?structiv?
pric? comp?tition, not long-t?rm advantag?.