The Role of Strategy in Management

Achieving competitive advantage is not likely to be a formal goal of a business. However, having competitive advantage means a company will have resources to pursue its goals. When firms beat their competitors it means they can finance more research and development to improve their products or services; they can spend more on advertising and promotions to attract customers; they can donate to charities to improve community relations; and they can provide greater profits to their owners. In short, competitive advantage is the means to meeting organizational goals.

Because strategy is a plan to achieve long-term goals, we can define strategy as a plan to create sustainable competitive advantage.

Walmart's supply chain helps to keep its prices low, giving it a competitive advantage over others.