Competitive Advantage Of Business Strategy

competitive advantage. In simple terms, resources are what you have and capabilities is what you do with those resources. Resources and capabilities helps to create competence in the market.
In today’s world, where customers demand and preferences are unpredictable and to identify the customers and the way to serve them are changing. Those firm who use market focused strategy may not run for the long run. The greater the change in external environment there is more possibility resources and capabilities will provide a secure basis for long term strategy. Through the development of resource and capabilities firms maintain competitive advantage. Firm get profit not doing the same as their competitors but by making different than other. In other

input and output market. In the market for input firms purchase raw material, labor services whereas in market for output they sell their goods and services to the clients. But in both market, they create value for consumer and suppliers. Every organizations need business strategy to earn profits. Industry analysis is useful for corporate strategy and business strategy. Corporate strategy helps to decide in which industry the firm should work with and how should it allocate resources among them. Whereas, business strategy focuses on establishing competitive advantage by studying needs of the customers and the way to compete with competitors.
To earn profits a firm must understand customer needs by creating value for them. But to create a value they should obtain goods and services from suppliers. Therefore, the relationship between customers, suppliers and competitors is the core of firm business environment. The two factor which determines the profitability of the firm are theory of monopoly and theory of monopoly and theory of perfect competition (GRANT, R. M.,

The potential to produce profit for the firm depend on three factors, Potential to establish competitive advantage, to sustain and to appropriate the returns from competitive advantage. There are two factors to establish competitive advantage
(i) relevance: To create competitive advantage resource and capabilities plays a very important role by making success in market. To be success firm should create value to the customers.
(ii) (ii) scarcity: resource should be available in the firm to run but is not sufficient to create competitive advantage. Moreover, to create sustainability of competitive advantage a resource should be durable. A durable resource has the ability to support competitive advantage. To understand about the firm condition, It can be a good way to ask mangers about the good things that company have done as well as what was the bad part about it and did they notice any change in pattern or not (GRANT, R. M.,