Question

Definition of competitive advantage and the relationship with strategic formulation.

Answer 1

The competitive advantage created the understanding for a company to have the necessary conditions and considerations that allow it the ability to produce a good or service that is either lower-priced or more desirable by its customer base. The conditions are presented due to the presence of an optimal number of processes and methods employed by the organization as a result of meticulous market research, experience, and constant endeavors to redesign processes from the ground up wherever necessary. We can say that it can also be considered to be due to the high level of specialty the company brings to the equation, that can be due to any number of factors, such as its human resource or through intellectual property.

Now, since we have established that the company’s processes have a significant role to play in the process of generating competitive advantage, it is safe to say that strategic formulation is the reason the entire chain of processes can be established and, therefore, worked. For any company, the necessity of its value chain is dependent on the considerations of its corporate strategy, providing both the direction the company wants to take and the systems and processes it intends to establish. Assuming all other factors are common between two given companies, the human resource factor and, therefore their strategy is the sole deciding factor that gives rise to the competitive advantage. Thus, for a company to try and become competitive, the establishment of a corporate level and, thereby, functional level strategies are necessary to establish specialized and day to day operations for optimal performance of all the present systems.