We define strategic management as "consisting of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages." We believe this definition captures two main elements of the field of strategic management.
First, strategic management entails three on-going processes: analysis, decisions, and actions. That is, managers must analyze the internal and external environment as well as their hierarchy of goals in order to formulate and implement strategies.
Second, the essence of strategic management is the study of why some firms outperform others. We draw on Michael Porter's work to make the important distinctions between strategy and operational effectiveness. Managers must create competitive advantages that are sustainable over a period of time, instead of merely temporary. That is: How can we create competitive advantages in the marketplace that are not only unique and valuable to our customers, but also difficult for competitors to copy or substitute?
Please answer the following questions for this post:
What firms are you familiar with that have created advantages in the marketplace that were very temporary?
What companies do you feel have created a strong competitive advantage in the marketplace that is unique and difficult to emulate?