Introduction to Competitive Advantage

Read this section for an understanding of competitive advantage and the role technology can play in sustaining a competitive advantage. While a bit dated, the principles remain the same, as do the processes and understanding needed to execute them. Complete the exercises at the end of this section. Also, answer the following questions in your notes: What is strategic positioning? How might technology be used to achieve strategic positioning?


Learning Objectives

After studying this section you should be able to do the following:

  1. Define operational effectiveness and understand the limitations of technology-based competition leveraging this principle.
  2. Define strategic positioning and the importance of grounding competitive advantage in this concept.
  3. Understand the resource-based view of competitive advantage.
  4. List the four characteristics of a resource that might possibly yield sustainable competitive advantage.

Managers are confused, and for good reason. Management theorists, consultants, and practitioners often vehemently disagree on how firms should craft tech-enabled strategy, and many widely read articles contradict one another. Headlines such as "Move First or Die" compete with "The First Mover Disadvantage". A leading former CEO advises, "destroy your business," while others suggest firms focus on their "core competency" and "return to basics". The pages of the Harvard Business Review declared, "IT Doesn't Matter," while a New York Times bestseller hails technology as the "steroids" of modern business.

Theorists claiming to have mastered the secrets of strategic management are contentious and confusing. But as a manager, the ability to size up a firm's strategic position and understand its likelihood of sustainability is one of the most valuable and yet most difficult skills to master. Layer on thinking about technology - a key enabler to nearly every modern business strategy, but also a function often thought of as easily "outsourced" - and it's no wonder that so many firms struggle at the intersection where strategy and technology meet. The business landscape is littered with the corpses of firms killed by managers who guessed wrong.

Developing strong strategic thinking skills is a career-long pursuit - a subject that can occupy tomes of text, a roster of courses, and a lifetime of seminars. While this chapter can't address the breadth of strategic thought, it is meant as a primer on developing the skills for strategic thinking about technology. A manager that understands issues presented in this chapter should be able to see through seemingly conflicting assertions about best practices more clearly; be better prepared to recognize opportunities and risks; and be more adept at successfully brainstorming new, tech-centric approaches to markets.

Creative Commons License This text was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor.