This chapter covers the following objectives:

  • The central role of competitive advantage in the   study of strategic management and the three generic strategies: overall cost leadership, differentiation, and focus.
  • How the successful attainment of generic strategies can improve a firm’s relative power vis-à-vis the five forces that determine an industry’s average profitability.
  • The pitfalls managers must avoid in striving to attain generic strategies.
  • How firms can effectively combine the generic strategies of overall cost leadership and differentiation.
  • What factors determine the sustainability of a firm’s competitive advantage.
  • How Internet-enabled business models are being used to improve strategic positioning.
  • The importance of considering the industry life cycle to determine a firm’s business-level strategy and its relative emphasis on functional area strategies and value-creating activities.
  • The need for turnaround strategies that enable a firm to reposition its competitive position in an industry.