What does a competitive strategy define?

A competitive strategy defines how a company plans to attract customers and achieve a competitive advantage in the market. It encompasses the customer needs that the company aims to satisfy and outlines the overall approach the business will take to meet those needs effectively. This focus on customer satisfaction is crucial because it shapes product development, marketing strategies, and customer interaction, ultimately determining the company’s success in a competitive landscape.

In contrast, while options related to the target market and pricing, manufacturing processes, and distribution channels are important aspects of a business’s operational framework, they serve as tactical components or tools to implement the overall competitive strategy. The primary emphasis of a competitive strategy is understanding the customers and their needs, which guides all other business decisions. Hence, identifying and addressing customer needs effectively becomes the foundation of a strong competitive strategy.