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.
