Business Strategy for Building Competitive Advantages

Business Strategy for Building Competitive Advantages

by D6565 – Hasna Larasati

The development of strategic management to achieve competitive advantages, it is necessary to have “Resources Based Value (RBV)” to develop competence, capability and resources, or in other words, currently it is called “Strategic Change”. Before explaining further, the definition of Strategy is a group of coordinated actions with managers or each function in the company used to beat competitors, not just profit. Strategy depends on prediction. The most important anticipation in a new situation or emergence strategy is the full of surprise, full of lack, and blessings. Strategy is closely related how we building a business. Business face 3 central questions: (1) What is our present situation?; where is he competent, (2) What should the company’s future direction be and what performance targets should we set?; what kind of company do you want to be in the future, what are the performance tactics, for example from a financial perspective, etc, (3) What’s our plan for running the company and achieving good results?

There are the pattern of actions and business approaches that define a company’s strategy. All the patterns described in the picture must be carried out at each stage because they are all interrelated. Strategy is execution. Depending on the integration and coordination plan, it is difficult to imitate. Based on Porter’s theory to be a system; do the same thing but in a different way, in other words, diversification or alignment; perform different integrated activities than competitors.

There are strategies for building competitive advantage: Low-Cost Provider, Focused Low-Cost, Focused Differentiation, Broad Differentiation and Best-Cost Provider. How can you be the best cost provider but stuck in the middle? If you choose one of these strategies, you will be stuck in the middle. If the best cost provider deliberately chooses the two, they combine it into a hybrid strategy. For example, the Lexus brand has car types such as Mercedes and BMW but offers a pricing strategy like the Toyota brand. Another example is the fashion brand, Coach, not in the same class as Louis Vuitton and Hermes, its products are luxury but the price is far below, the tagline is accessible luxury. Therefore, if you are stuck in the middle, you will fail to choose one strategy.

If the company is still small or a start-up, not many have succeeded, then choose with risk. Must be able to choose where to go. Differentiation, experiencing high economies of scale, per unit can be sold cheaply. For elite level differentiation, there are a lot of costs in marketing, only a stagnant inventory. So you can choose low cost first. The problem faced by low cost is reputation. From low cost began to develop into differentiation. So, the first thing to look at is loyal buyers. If you see that the strategy has not been achieved, the scope of the circle has just been expanded. Strategies also need to evolve: changing market conditions, changing technology, competitors, buyer preferences and so on. If he wants to participate in the market game, wants to be a dominant player or still gets the desired performance target. Strategy is about asking the right questions: What must managers do to make a firm or a business successful in the market? and strategy requires getting the right answers: Good strategic thinking and management of the strategy making, executing process are important and first-rate capabililities and skills in crafting and executing strategy are essential to managing successfully.