How is 'competitive strategy' defined?

A competitive strategy is defined as a long-term plan that organizations put in place to achieve a sustainable competitive advantage in their industry. This involves identifying what unique advantages a business can leverage over its competitors, whether through differentiation, cost leadership, or focus strategies. The goal is to set forth a comprehensive approach that shapes the company's direction, resource allocation, and operational focus over an extended period, enabling the business to succeed in a competitive environment.

In contrast, pricing tactics or short-term marketing campaigns do not encompass the broader, strategic vision required for sustained competitive advantage. Pricing tactics may adjust based on market conditions and immediate sales objectives, while marketing campaigns are often time-bound and focus on specific promotions rather than the overall strategic landscape. Regulatory guidelines also influence market behavior but do not constitute a competitive strategy, as they do not pertain to a company’s internal strategy for gaining an edge over rivals. Thus, the long-term approach inherent in a competitive strategy is what differentiates it from these other options.