The origin of the word strategy goes back to the Greek word of "Strategos" that had been used during the war between the Greeks and the Persians in 506 AD (Rashid & Julab, 2015). That means the art of war and battle management. Webster New World dictionary defined strategy as the science of planning and directing military operations (Almagraby, 2007). Oxford dictionary defined strategy as the art of buildup and movement of military equipment's in order to totally control the enemy (Jawad, 2010).
The task of forming a business strategy is the soul and center of business management and marketing. Business strategy is the managing of a plan to acquire a share of the market, to attract customers, and to accomplish organization goals. As a result, business strategies are the choices made by managers to enter, operate, and compete in markets (Thompson et al., 2004).
Study Theoretical Frame
According to Idris & Al-Ghalebi (2016), in his famous article (The Strategy Concept: Five Ps for Strategy) Mintzberg was able to form a comprehensive strategy concept that include the opinion of several researchers and created the five Ps of strategy:
Plan: To determine behavior and dealing with specific situation and designed to achieve goals and how management determines business direction.
Ploy: Entering competition world and concerned with deceiving and circling competition.
Pattern: Integration of parts through intended and unintended behavior to reach the center.
Position: Stable situation in environment and business location that is dynamic and effective.
Perspective: The ability to visualize things in their correct relations.
Wheelen & Hunger (2010) defined organization strategy as a designed comprehensive plan that explains how organizations accomplish their mission and goals. It also emphasizes competitive advantage and deemphasizes competitive weakness. In general ideal business organizations depend on three levels of strategies; organization strategy, business strategy, and operational strategy (Idris & Morsi, 2006).
As mentioned earlier, Wheelen & Hunger (2010) explains strategy levels in companies as follows:
Organization level strategies: concerned with determining competition as what business type the organization is in, what new business the organization will enter, what business the organization with withdraw from, and how to concentrate resources on businesses the organization competes in and accomplishing its goals (Al-Issawi et al., 2012). The most important strategies at organization level according to ALDahan et al. (2011) are growth, stability, decline, and mix strategies.
Growth strategy: the strategy an organization follows in order to accomplish new goals at higher levels from previous goals. This can be done by internal growth to expand operation locally or internationally and external growth by merging, acquiring, or strategic alliance. According to David (2011), merging between two companies, acquiring is to buy other businesses, and strategic alliance is partnership with other business to accomplish strategic goals of mutual benefit. Growth strategies are either focus or diversity strategies.
Stability strategy: it is the strategy that an organization follows to remain at current position that includes according to Al-Durra & Jaradat (2014), Alghalbi & Idris (2007) alternatives such as stop and proceed with caution, slow growth, avoid change, profit and harvest.
Decline Strategy: the strategy that organization follows when it needs to downsize and can choose one of the following alternatives such as circle, merge, sell and consolidate or bankruptcy.
Competitive advantage is a concept that had been used to describe the performance of a company compared to the competition in the market. Such advantage is based on the difference between different organizations that allows them to compete and for that to happen, companies must create more value for their customers than competition (Navarro-Garcia et al., 2018). Dimensions of competitive advantage:
David (2011) defined quality as the method used by organizations to actually accomplish a competitive advantage and a path to fast growth and profit. Hill & Jones (2008) defined quality as everything related to product such as design, form, trust, performance, and features where the product add value more than competition. Further, Evans & Collier (2007) said that products with higher qualities improve business reputation and customer satisfaction which allows companies to charge higher prices for better qualities.
Quality was defined by AlSabbagh (2002) as a philosophy of culture, organizing, and managing that depend on continuous improvement of products and participation of all workers in organization. Also the concentration on servicing customer needs and wants in order to accomplish goals of growth, survival, and stability.
Other researchers indicated that quality means the ability to offer products that meet customer needs and wants (Zolghadar, 2007), quality is the different view of customers or organization that meets different customer expectations which mean products are trusted and efficient to meet customer needs (Atem & Yella, 2007). As a result, the researchers believe that quality is a cornerstone of business success where products meet or exceed customer wants and needs. Such a notion is the soul of competitive advantage.
It is considered a major dimension in competitive advantage in today and future markets as customer needs and wants are changing and diversified where flexibility means the fast response to changing customer demand and minimizing response time (ALShawabkeh, 2016). Evans & Collier (2007) in Taleb & Zainab (2012) suggested that many organizations use flexibility as a competition tool that explain the capacity and ability to adapt successfully with the changing market environments and operations.
Furthermore, strategic ability of organizations and building a competitive position depends on the knowledge of customers and maintaining long term relation. In addition, retaining current customers and satisfy their needs with fast and quality service. According to Hill & Jones (2008), competitive advantage results in profit. At the same time, profit depends on product value, price, and production cost.
The researchers agree that flexibility is one of the major dimension of competitive advantage and any organization that wants to succeed, survive, and grow must respond to customer wants and needs in minimum time and cost.
It is considered the oldest dimension of competitive advantage that means the ability of organizations to produce and distribute products with minimum cost compared to competition. Cost plays a major role in product pricing where minimizing cost allows companies to charge lower prices and create a competitive advantage and control markets. Such strategy holds true in markets where customers are sensitive to prices (Idris & Al-Ghalebi, 2016). The researchers suggest that reducing cost related to human resources especially indirect cost (transportation and driving compensation) is possible by hiring local employees. Such close distance labor will help organization save on transportation and driving costs and support the reduction in production cost.
Innovation is considered the base of success for organizations. Innovation wins customers and satisfies their needs and future wants. Innovation is defined as the application of an idea developed inside or outside the organization, and related to product, system, operation, policy, program, or service (Hareem, 2010).
There are some researchers who differentiate between innovation and creativity. They believe that innovation proceed creation and its role to deliver the idea, where creation apply the idea. Others see innovation as part of creativity, where innovation is global, and creativity is local (Hareem, 2010). In addition, some researchers call for the separation between innovation and creativity. They suggested that innovation relates to distinguished new idea, where creativity applies the new idea in a form of operation, product or service (Belmahdi & Broush, 2005).
In general, it is for certain to say that innovation proceed creativity and a condition for...