Conventional strategic management is difficult to teach. The subject is not in itself difficult. But there are so many models and tools to cover that students tend to remember lots of small details but fail to see the bigger picture. There are, in fact, only three things that are important in strategic management: competitive advantage, competitive advantage, and competitive advantage. Although stating the obvious seems boring, it is surprising how many people forget this basic principle after studying the intricacies of strategy for one semester.
As Muslims, our interest in competitive advantage has less to do with superior returns on investment and more to do with the fact that competitive advantage generally increases the probability of the organization surviving in the long term.
By far the most important concept in strategic management is competitive advantage. Like most concepts in management, there are numerous definitions, and each definition has its own implications. However, one simple definition is:
Some people might argue with this definition of competitive advantage. However, it has two benefits. First, it is an accepted definition among many scholars of strategic management. Second, it allows a simple test to measure competitive advantage. Consider Table 2.1.