Competitive strategies and barriers to achieving competitive advantage : a study of two Saudi Arabian industries.

This study focuses on how organisations achieve and sustain competitive
advantage and the possible barriers to this advantage. It first deals with a
theoretical framework by examining related literature on developing a better
understanding of competitive advantage and generic strategies, as well as the
important aspects that may affect a firm's achievement and the sustainability of
its competitive advantage. This study extends the strategic management
literature on competitive advantage and generic strategies mainly based on
Porter's (1980, 1985) work. In particular, instead of the two generic strategies
(differentiation and cost leadership) put forward by Porter, four competitive
strategies are developed. These are (1) price leadership, (2) low cost
differentiation, (3) imitation and (4) differentiation.
Barriers to competitive advantage are conceptionalised in terms of
"strategic coherence" model, which has three aspects. Competitive strategies
require internal consistency referred to as 'competitive coherence'. In addition,
'organisational coherence' needs to be built, involving the structure of internal
and external elements affecting an organisation's ability to achieve its
competitive advantage. The creation of this structure is not automatic. The
difficulties increase with growing dynamism and complexity of the environment
in which an organisation is operating. While competitive and organisational
coherence might exist accidentally, the third aspect developed in this study is
called 'cognitive coherence'. The lack of coherence in one or more of these
aspects is a barrier to a firm achieving and sustaining its competitive advantage.
Secondly, this study reports empirical evidence on the validity of the theoretical
framework. This study takes the case of two different industries (petrochemical
and food) in Saudi Arabia.
Results indicate that all four competitive strategies are possible and
statistically defined. In addition, high-performing firms, in both industries, have
more strategic coherence than lower performing firms. The results suggest that
high-performing firms are able not only to achieve their competitive advantage
but also to sustain it over time. Moreover, in each industry, firms with different
competitive strategies have different barriers to achieving their competitive
advantage. These results are consistent with those found in the existing
literature, lending support to the view that western strategy models seem to be
applicable to developing countries such as Saudi Arabia.