Competitive strategy

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Profitability curve for competitive strategies

Competitive strategy (hereinafter, the Strategy) is a formulated strategy for how a strategic business unit (SBU) is going to compete. This formulation usually states which one of four types of competitive strategies the strategic business unit is going to pursue, what it considers as its competitive advantage or advantages, defines its business model, and may or may not include (a) what products, (c) resulted from what production, (d) at what price, (e) using what presentation and promotion, (f) on what market or markets with regard to the region or regions and/or segment or segments of customers, (g) with what front-end office personnel, (h) with what level of enterprise's support this enterprise is going to offer, as well as (i) what financial results and/or competitors' actions would trigger what changes in those decisions. Rarely, a mature enterprise formulates just one competitive strategy; usually, there are several competitive strategies in the enterprise portfolio since different strategic business units are supposed to have their own competitive strategies.


According to Management by Robbins and Coulter (14th edition),

Competitive strategy. A corporate strategy for how an organization will compete in its business(es).

Related concepts

  • Core competency. An organization's major value-creating capability that determines its competitive weapons.
  • Competitive advantage. What sets an enterprise apart; its distinctive edge.

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