There are many strategic approaches a business can take for it to have sustainable competitive advantage. One of the strategic approaches that a business can take is cost leadership. Cost leadership occurs when a company provides similar quality products as its competitors but at a reduced price ( Dyer et al., 2017 ). For this strategy to be effective, a business should look for suitable ways to manufacture products at a reduced price by use of perfection of production techniques.
Apart from cost leadership, differentiation is another strategic approach that businesses and company use to distinguish themselves from their competitors. Firms that want to differentiate themselves from others search one or more attributes in the market that can distinguish them from their rivals. As opined by Hitt et al. (2016), these companies then look for the market segment suits these attributes and market them. Other businesses carry market research to identify things that are suitable to the consumers and create a market for the products.
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Defensive strategy is an approach that businesses can use to gain a competitive advantage. This strategy permits businesses or companies to distance themselves from competitors by maintaining the competitive advantage it has gained (Pogodina et al., 2020). This strategic approach relates to cost leadership as well as differentiation because it is utilized by companies to maintain those advantages put in place by differentiation and cost leadership. Another strategic approach that can be used to maintain a sustainable advantage is pooling resources through strategic alliances. In this case, the company collaborates with other companies in the same industry. However, the business has to remain on its line to minimize collusions between the alliances. This kind of approach is common along joint ventures lines that companies utilize it to amass resources and further get exposed more than its competitors.
References
Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2017). Strategic management: Concepts and cases . John Wiley & Sons.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.
Pogodina, T. V., Muzhzhavleva, T. V., & Udaltsova, N. L. (2020). Strategic management of the competitiveness of industrial companies in an unstable economy. Entrepreneurship and Sustainability Issues, 7(3), 1555-1564.
