Question

Discuss business strategy & competitive advantage.

Answer 1

       There are a number of businesses operating in different parts of the world. These businesses may differ in a lot of things but what is same in all these businesses is the objective of fulfilling the ultimate goals of the organization.

      Business strategy can be referred to as the mix of all the diversified decisions taken and various actions performed by the people of a business in order to achieve the goals of the business. It also helps in gaining a competitive advantage over competitors in the market. If there is no strategy, there is no point in doing business because the efforts being put in by the employees are going to be waste and no objective would be fulfilled. What makes two identical businesses different is the strategy being followed in the organization.

       SWOT analysis under business strategy is its most important component. It helps in finding out the strengths of the business and tapping the opportunities available currently. Moreover, it helps in converting weaknesses into strengths, if possible and being aware about the possible threats to the business.

        A competitive advantage is an edge or advantage that a business has over its competitors by practicing a number of things such as offering customers a greater value, by either lowering prices or any other means. It helps a business entity in increasing its market share which helps in generating more sales, and that too by a greater margin.

       Before establishing a competitive advantage, it is important to lay importance on three main factors – benefit of that advantage, target market and landscape of other competitors. In other words, it is to be decided what benefit is to be delivered to which section of the market and in a way that is not being done by the competitors. Business strategy and competitive advantage go hand in hand because competitive advantage helps the business to stand out, in order to achieve the targets being set in business plan following a business strategy. Hence, the two are inter-dependent and extremely important.