Strategic Management for Competitive Advantage in Business
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1. Definition and Importance of Strategy
- Definition: Strategy is a firm’s theory on how to gain a competitive advantage by creating value that differentiates them from competitors.
- Importance for Small Businesses:
- Enables navigation in competitive markets.
- Encourages innovation and long-term growth.
- Helps achieve profitability and economic diversification.
- Example:
Eisner's Strategy: Focused on extraordinary entertainment to attract premium-paying customers.
2. Strategic Management Process
The strategic management process is a systematic approach to achieve organizational goals.
Key Steps:
- External and Internal Analysis:
- External: Identify opportunities and threats (e.g., social trends, technology, and demographics).
- Internal: Assess strengths and weaknesses