Final answer:
Organizations manage competitive advantage either through product leadership by offering superior products or operational excellence by providing goods and services more efficiently. Innovation can lead to temporary market dominance and higher profits. A focus on core competency tends to drive success more than a broad product diversification.
Step-by-step explanation:
Managing for competitive advantage is crucial for exceptional managers. Some organizations achieve this by focusing on product leadership, wherein they offer goods and services that exceed the quality of their competitors. Other organizations may instead prioritize operational excellence, concentrating on delivering goods and services in a faster and more cost-effective manner. This can be contrasted with strategies like cost leadership, which emphasizes reducing production costs, and product differentiation, which is about creating products with unique attributes desired by consumers.
In the words of Gregory Lee, former CEO of Samsung, a strong commitment to innovation allows a business to maintain a temporary competitive edge and earn above-normal profits. Similarly, a company that focuses on its core competency, or main strengths, often outperforms competitors that diversify too broadly. This strategic focus on a narrowed product line can lead to more significant success because it allows for specialization and a better alignment with consumer desires.