Strategic management is a concept that assists management to focus on the key issues of the organisation that will help it develop a competitive advantage. The concept of strategic management and the notion of competitive advantage are therefore inextricably linked.

Often the implicitly assumed objective in any organisation is its dependence on effective management for ongoing survival – to ensure that there is still an organisation to manage in the future! Management must therefore make many important decisions to determine where the organisation should be heading and how it will get there. However, this is an ongoing process, for as market trends and internal factors change, so should an organisation’s goals. Thus as part of the planning process, managers need to first understand the intricacies of their own organisation, as well as the external and competitive environment in which they operate.

The most common approach is to use a SWOT analysis as the starting point, which involves analysing the internal strengths and weaknesses of the organisation as well as the opportunities and threats in the external environment. Evaluat

Strategic management concepts invoke the notion of competitive advantage to explain the organisation’s performance. Tools such as the SWOT analysis investigate competitive advantage and assist in describing how it works. Once the relevant factors are measured and determined, strategies can be formulated, implemented, and most importantly, continually monitored to sustain an organisation’s competitive advantage. Again there are many strategy tools that management can adopt such as those suggested by Porter or The Miles and snow topology. The relationship between resources, profitability and competitive advantage of an organisation should form the basis of formulating strategies. Together they will ultimately be responsible for the organisation’s profitability. However, having the immediate competitive advantage is not enough, for the overall goal must be to sustain it. This requires an understanding of the mechanisms by which the organisation’s unique characteristics can be exploited to maximum effect. To continue the example of ILM, the fact that it has the manufacturing hardware to produce large-scale visual effects, gives it the potential to create difficult-to-imitate and competitively significant capabilities. Because strategic management focuses on the future of the whole organisation, it is oriented towards long-term goals. Sustaining competitive advantage is a pivotal factor. Just as it has been argued that the main purpose of any strategy should focus on how to maintain the organisation’s competitive edge, it follows that an organisation’s competitive advantage will ultimately help it reach its strategic goals.

But what happens when an organisation is not implementing the valuable strategies being utilised by its competitors? A competitive disadvantage is usually the end result, together with disappointing levels of performance. This is often caused by the failure of the organisation to recognise or overcome their weaknesses (Davidson and Griffin, pg 268). This highlights the importance of management to determine the organisations weaknesses honestly, in order to address ways of removing, or at least minimising them.

ing an organisation’s internal strengths and weaknesses assists in determining the competitive advantage of an organisation’s resources and capabilities. This can include financial resources such as

Some topics in this essay:
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