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Competitive advantage management is the process of identifying and effectively managing the way in which a particular company gains and maintains a competitive advantage. This is a form of management that often permeates through various levels of a company, with the ultimate goal being an effective means of establishing a competitive advantage for that company. Once this advantage is established, then efforts are made to ensure it is maintained through long-term planning and proper execution of such plans. Competitive advantage management is often provided by officers within a company or by a third-party company that acts as an adviser to a business.
A competitive advantage is a type of advantage that one business may have over competing businesses in the marketplace. This advantage can come from a number of different sources, and effective competitive advantage management stems from properly identifying and utilizing those resources as quickly and thoroughly as possible. Natural resources, for example, can be sources of competitive advantage for a company. If a particular company is able to gain resources, such as raw materials or power, at a higher quality or lower price than competing businesses, then the company can apply competitive advantage management to maintain those resources and use them as effectively as possible.
Competitive advantage management can also utilize the resources within a company, such as its employees and managers. Human resources (HR) management is often used to identify employees who may provide advantages for a company, and then cultivate the skills and loyalty of those employees. As the importance of computers and information technology (IT) has expanded in the business world, these resources have also become essential to proper competitive advantage management. A company should be able to identify where it can make improvements in IT to gain an advantage over competitors, and how continued development can maintain or expand that advantage.
Due to the complex nature of competitive advantage management, which often overlaps multiple operations within a company, certain skills are required for effective management. An officer or high-ranking manager within a company usually oversees this type of management and coordinates the efforts of other managers to ensure ongoing advantages are identified and utilized. Some companies specialize in competitive advantage management and provide their services to other businesses in an advisory capacity. These companies often coordinate the various departments of a business and provide a general plan for establishing and maintaining a competitive advantage for that business.