Strategic management perspective. Management Term Paper

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Question 4: Even when they have similar resources, why do some companies perform better than other companies when competing in the same industry? From strategic management perspective.
Managers design a competitive strategy that is fundamental to ensure the success of the businesses in their respective marketplaces. This means that the company has to ascertain its market position that conforms to the requirements of a competitive environment. Generally, the most accomplished company has the best resource and strategy fit because these are the essential variables in performing better in finances (University of Utah, 2017).
The differences in the competitive strategy are the key to why some companies outperform others despite having similar resources. A competitive advantage allows the company’s products to be recognized as more desirable than its competing companies. To achieve this, the company must have a differential advantage, which represents its products as unique and has higher quality, and comparative advantage, which shows the company’s efficiency (Twin, 2020). Three primary factors affect the competitive strategy, namely, industry analysis, dominant business model, and analysis of the company capabilities (University of Utah, 2017).
First, industry analysis studies the forces in the industry that affect the financial performance of a company. Here, the number of firms and market shares are analyzed. Additionally, negotiation with power firms is given equal importance since these have a significant impact on profitability (University of Utah, 2017).
Second, the dominant business model shows how the company prioritizes its customers. This creates a significant difference among competing companies with the same resources. The company will only have a competitive advantage when the necess...