Business and Strategic Management: Concepts and Models for Competitive Advantage

This paper examines the concepts of strategic capabilities, core competencies, and strategic competitive advantage. It also discusses the strategic management process and models used to evaluate the linkage and relationship with Nestle Company. The role of the CEO in developing these concepts is also highlighted with an example of Jeff Bezos.

Business and strategic management

Business and strategic management
Abstract
It has been examined that there are different concepts related to strategic capabilities,
core competencies and strategic competitive advantage. The main purpose of this paper is to
examine the different concepts and in this paper, the in-depth analysis is made on the different
concepts. In the first phase of the essay, the concepts such as Strategic capabilities, core
competencies and strategic competitive advantage are elaborated. In the next phase, the
discussion is on the strategic management process in context to these concepts and in the next,
Models are used which will help to outline these concepts. In the last phase, the role of the CEO
and an example of Jeff Bezos is given. Therefore, by analyzing all these factors it is said that it is
important for the management to emphasize on these factors so that it could be easy for the
company to maintain a competitive advantage in the market.
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Business and strategic management
Strategic capabilities, core competencies and strategic competitive advantage
In this paper, the discussion will be made on the concept of strategic capabilities, core
competencies and strategic competitive advantage. It has been analyzed that these concepts are
necessary to be considered by the management as it provides directions to be considered by the
management. Also, it can be said that the CEO of the company should consider the concepts as it
assists in attaining the competitive advantage in the highly competitive market. Therefore, the
paper will highlight the different concepts of strategic management in reference to the role of the
CEO in attaining the competitive advantage.
Strategic capabilities
This concept can be defined as the capability of the members of the company which helps
them to deploy and form the strategies. The strategies which are pursuit by the management
assist in attaining the sustainable advantage. Strategic capability is related to the ability of the
business that assists to consider the competitive strategies which allow them to survive and to
enhance the value over time (Grant, 2016).
The strategic capabilities do not emphasize on the strategies of the business users, but it
emphasizes more on the organization assets, resources and market position. The difference
between strategic capabilities and core competencies can be related to actions that impact the
long term growth and development. In strategic capabilities, the emphasis is given on creating
internal structure and process that enable the business to adapt the customer needs and strategic
needs. The core competencies emphasize on the resources and the skills required by the company
(Bayraktar, Hancerliogullari, Cetinguc &Calisir, 2017).
Core competencies
It is defined as the combination of the resources and skills that helps the company to
compete in the marketplace. It is important to focus on the exceptional skills, strategies,
technologies so that activities can be managed effectively between managers and employees. It
is also one of the best known strategic concepts which assist the firm to compete in the high level
of the competitive market. There are different core competencies that should be maintained by
the company so that it could be easy to attain a positive outcome. The core competencies can be
related to analytical thinking, computer competency, creative thinking, conceptual thinking and
forward thinking. These competencies are the resources and also the strategic advantage of the
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Business and strategic management
business that consists of pool knowledge and technical skills. The three characteristics of the
core competencies are related to creating the perceived value for customers, boosting the wider
market applicability and also to compete with the rivalries present in the market (Belton, 2017).
Strategic competitive advantage
It is a strategic concept in which the company focuses on the profits that exceed the
average ratio of the industry. In this, the company aims to maintain its competitive advantage
over its rivalries present in the market. The competitive advantage is attained by the company by
providing the customers greater value and it is done by offering the products or the services at a
low price or by maintaining the quality of the products. It is one of the effective strategies that
are related to core competencies which help to boost the market share of the company and can
also maintain the large customer base (Nankervis, Baird, Coffey & Shields, 2016).
Concepts in relation to the strategic management process
It has been observed that there are five steps in the strategic management process. The
first step is goal setting that has a link with the concept of strategic competencies. To maintain
the process of strategic management it has been seen that focus is given on the employees as they
are the one who considers the entire strategies that should be implemented in the workplace.
Also, the first step is to set the goals, so it is done by analyzing the capability of the employees
(Cascio, 2015).
The next step is analysis in the process of strategic management, in this core
competencies can be considered for future projections. The competencies are related to the
availability of resources such as technologies and resources. In this step, the overall analysis is
made of the resources that should be present so that it could be easy to boost the productivity
which will affect the resources which are available in the market. By considering this step, it
would be easy to analyze the need for the resources and their demand in the market (Morden,
2016).
Strategy formation is the next step, which can be done by considering the concept of core
competencies present in the company. It is examined that by analyzing the resources, it will be
easy for the company to form the strategies that are effective in relation to the activities of the
company. In this step, the concept of core competencies will be implemented and this will assist
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in maintaining consider the effective and useful strategies for the company. Strategies are
important to be implemented in the company so that growth can be attained in a highly
competitive market. Strategy implementation is the next step that focuses on the concept of
strategic competitive advantage (Chen & Miller, 2015).
It is evaluated that the strategies can only be implemented if there is a scope of attaining
the competitive advantage. Therefore, at the time of implementing the strategies, it is necessary
to focus on maintaining the competitive advantage as it can help in boosting the market share.
The last step is strategy monitoring in which the concept related to competitive advantage will be
considered. In this, it has been examined that the strategies success will be evaluated on the basis
of competitive advantage attained in the market. The growth achieved through success will help
to evaluate the competitive advantage in the market (Espinoza & Ukleja, 2016).
Models used to access and evaluate the linkage and relationship with
Nestle Company
Porter generic strategy for competitive advantage
Porter generic strategies are one of the best ways that help to boost the competitive
advantage. This strategy is taken into consideration by the company so that it could be easy to
survive for a long time in the market. The Nestle Company considered Porter generic strategy
that assisted in maintaining the competitive advantage through differentiation and cost leadership
strategies.
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Business and strategic management
(Source: Commereguide, 2019).
 Cost leadership strategy: In this strategy, the main focus is to maintain the cost of
the producers in the industry. The company considers this strategy as it helps to boost the
competitive advantage by the low-cost strategy of the company. Nestle offers standard products
with less differentiation that should be acceptable by the customers. It is evaluated that Nestle
chocolate and confectionary is considered as low-cost producer in the food sector. The company
never compromises with the products and services of the company and also the battle is still
going against the markets such as Italy and Germany. To reduce the process, the factory in
Switzerland has focused on the chocolate box filler machines so that it could be easy to attain
competitive advantage (Salavou, 2015).
 Cost focus: It is seen that, Nestle emphasizes on the low-cost advantage to the
different segments of the customers. The products that are similar will emphasize on maintaining
the high prices but it is necessary that it should be acceptable by the customers. The company
focuses on the traditional principles that boost the ability of the customers to communicate and
also it maintains the value chain (Noe, Hollenbeck, Gerhart & Wright, 2017).
 Differentiation focus: Nestle focuses on differentiating with different market
segments. In this, the emphasis will also be on the niche marketing strategy that will assist in
achieving the high prices in relation to undifferentiated products. The company positions its
products by focusing on strategic differentiation among the competitors such as Hershey and
Jacobs Suchard.
 Differentiation strategy: it is examined that in the high prices are taken for the
products and also focus is on the high production cost and extra value added Features which are
given to the customers. This strategy assisted in enhancing the market share of the company in a
highly competitive market (Van Alstyne, Parker & Choudary, 2016).
SWOT ANALYSIS
It is also one of the popular models and it is used to analyze the strength, weakness,
opportunities and threats that exist in the market. This is the model that can be used in relation to
the strategic capabilities and core competencies concept (Ureña, Chiclana, Morente-Molinera &
Herrera-Viedma, 2015). In reference to the Nestle Company, it has been analyzed that the
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company can easily evaluate the different factors related to resources, technologies and also
employees. The SWOT analysis of the Nestle Company will be:
Strength
The company has a diversified product portfolio that has been successful in penetrating
urban and also in the rural markets. Nestle has adopted the effective distribution method and
decentralization in the supply chain which helped in maintaining the visibility of the products in
the highly competitive market. The company also have more than 3, 40,000 employees who are
serving the customers (Akhtar, 2016).
Weakness
It can be said that there are many brands under the umbrella group so to manage the
overall brands is one of the difficulties for the company in the highly competitive market. Also,
there are legal and customer issues in which the company has to manage the issues related to the
product of Nestle which is baby formula boycott and child labor by suppliers (Hooper, 2016).
Opportunities
It has been seen that there are various opportunities that can be availed by the company.
It is important to focus on the concept of health and conscious which can help in boosting market
penetration. Also, the company should focus on boosting its partnership with different companies
for future growth.
Threats
It has been seen that the company is facing a high level of competition threat, so it is
important to maintain differentiation of the products in the market. By differentiating the
products, it could be easy for the company to boost its brand image in the market. Also, it will
help in maintaining the large customer base which will directly affect the sales of the company in
the highly competitive market (Kabue & Kilika, 2016). So, these are the models that can assist
and evaluate the linkages and relationships with the Nestle Company.
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The role of the CEO to develop these concepts
It is important to build and sustain the competitive advantage by developing the concepts
and this role is played by the CEO. It is important for the CEO to analyze the market condition
and according to that, these models should be considered. Planning is also one of the factors on
which the emphasis should be given so that accuracy in relation to the resources can be
evaluated. Planning is one of the best tools that should be considered as it helps to manage the
resources effectively which positively impact the profits of the company. The CEO should
consider the strategic capabilities and also core competencies as it would help in boosting the
competitive advantage in the market (Nisen, 2019).
Example of Jeff Bezos
It is examined that at the time of expanding the areas of operation from the bookstore to
the different segments such as clothing, accessories and groceries, he focused on analyzing the
different concepts by considering the models such as SWOT analysis and Porter generic
strategies. It can also be considered as the strength of the CEO in relation to the risk-taking. He
analyzed the need for the resources and taken a risk by investing the huge amount on the
business. The changes are bought, in which the bookstore was expanded in the different
segments of the products. At that time he took the risk by analyzing the strategic capabilities,
core competencies and strategic competitive advantage (Neilpatel, 2019).
It is concluded that that the concepts related to strategic capabilities, core competencies,
and strategic competitive advantage has an important role in boosting the entire activities of the
company. These concepts can help in enhancing the market share of the company and also boosts
the profits. These concepts are important to be considered by the CEO, as it offers them a
direction to consider effective strategies which will help to boost the image of the company in
the highly competitive market.
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