What does a company's competitive strategy define?

A company's competitive strategy fundamentally defines the set of customer needs it seeks to satisfy. This strategy articulates how a company positions itself in the marketplace and determines the value it offers to customers. By identifying specific customer needs, the company can tailor its products, services, and overall approach to meet those demands effectively, thereby gaining a competitive edge.

This strategic focus allows the company to differentiate itself from competitors, whether through cost leadership, differentiated offerings, or niche market targeting. Understanding customer needs is crucial because it shapes decisions across various functions, including marketing, product development, and supply chain management, all aligned to fulfill the defined competitive strategy.

The other options, while important, do not capture the essence of what a competitive strategy is. They relate more to operational or tactical decisions rather than the overarching strategy that guides how a company engages with its customers and competes in the market.