Many companies are using strategic alliances and collaborative partnerships to help them in the race to build a global market presence or be a leader in the industries of the future. Strategic alliances are an attractive, flexible, and often cost-effective means by which companies can gain access to missing technology, expertise, and business capabilities.

Mergers and acquisitions are another attractive strategic option for strengthening a firm's competitiveness. When the operations of two companies are combined via merger or acquisition, the new company's competitiveness can be enhanced in any of several ways—lower costs; stronger technological skills; more or better competitive capabilities; a more attractive lineup of products and services; wider geographic coverage; and/or greater financial resources with which to invest in R&D, add capacity, or expand into new areas.

Vertically integrating forward or backward makes strategic sense only if it strengthens a company's position via either cost reduction or creation of a differentiation- based advantage. Otherwise, the drawbacks of vertical integration (increased investment, greater business risk, increased vulnerability to technological changes, and less flexibility in making product changes) are likely to outweigh any advantages.

Outsourcing pieces of the value chain formerly performed in-house can enhance a company's competitiveness whenever an activity (1) can be performed better or more cheaply by outside specialists; (2) is not crucial to the firm's ability to achieve sustainable competitive advantage and won't hollow out its core competencies, capabilities, or technical know-how; (3) reduces the company's risk exposure to changing technology and/or changing buyer preferences; (4) streamlines company operations in ways that improve organizational flexibility, cut cycle time, speed decision making, and reduce coordination costs; and/or (5) allows a company to concentrate on its core business and do what it does best.

Crafting a strategy tightly matched to a company's external situation thus involves an understanding of competitive forces, driving forces, key success factors, and other unique industry conditions. For example, it is important for decision makers to consider the basic type of industry environment (emerging, rapid-growth, mature/slow-growth, stagnant/declining, high-velocity/turbulent, fragmented) and what strategic options and strategic postures are usually best suited to the specific type of environment.

The timing of strategic moves also has relevance in the quest for competitive advantage. Company managers are obligated to carefully consider the advantages or disadvantages that attach to being a first-mover versus a fast-follower versus a wait-and- see late-mover.

A blue ocean offensive strategy seeks to gain a dramatic and durable competitive advantage by abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.