Strategic HRM in Gaining Competitive Advantage

Competitive advantage,  the concept founded by Michael Porter  in  1985. also he created a framework in order to gain competitive advantage and organization to become unique form their opponents. (Armstrong, M.2006)

Source:https://slidemodel.com/templates/industry-analysis-powerpoint-template/matrix-model-of-porters-generic-competitive-strategy/
   1. Cost Leadership & Cost focus

Companies are always moving to become successful.  to compete in the market company should have an edge over their competitors. purpose of executing cost leadership strategy is to increase the market share and gain higher profit margins at a given price. with implementing Cost Leadership the firm will able to survive in the market by offering a high product at a lower cost since it will increase their no of sales. (Farooq,U 2016)

 2. Differentiation / Innovation & Differentiation focus

Separating companies' product or services from other competitors in the same industry by making the product or service different than competitors. some examples of differentiation strategy as follows, (Tanwar, R. 2013 )

• Product Performance.
• Quality of product & service.
• Durability.
• Brand Image.
• Functionality.

As stated before, in order to implement the above strategies, the company will require to have the necessary skills and knowledge. both strategies are connected with human skills, knowledge and as well as their productivity, commitment and efficiency. Therefore, managing human resource wisely and strategically will be very important, while implementing strategies. furthermore, Implementing both Cost leadership strategy & differentiation strategy in the organization is challenging since the firm will require to have a strong monitoring and analyzing system. below table exhibit the key requirements, that organization should have to implement the above two strategies. (Armstrong, M.2006)

Linking HR and Competitive Strategies

Source: Armstrong, M.(2006) Strategic human resource management: a guide to action (p62)

How HR can be used as a Competitive Advantage and what it's role?

Analyzing Data

With analysing organizational data HRM can determine the efficiency or high-performance employees. Moreover, they can determine the unique skills of employees with analysing their past performance, their level of education, which area they specialize in (Marketing, Production planning, branding, engineering, etc.).  also, the HRM department can use those data to carry out the strategic positioning of employees and utilize.  (Miller, B 2017)

Effective Recruitment

Hiring the right employees and positioning them for the right position is very important to achieve organizational goals. HRM department will allow the organization to have talented and knowledgeable professionals to execute organizational strategies.  (Miller, B 2017)

Designing, Training & Development

Employee training and development will help the organization to retain its employees. Furthermore, it will increase job satisfaction, moral, level of motivation, and also it will help to reduce employee turnover as well. (Miller, B 2017)

Reference :

• Armstrong, M.(2006) Strategic human resource management: a guide to action.3rd ed. London, Kogan Page.

• Farooq,U (2016) Explain the Low Cost Leadership Strategies. Business study notes [online].Available at <https://www.businessstudynotes.com/finance/strategic-managment/explain-the-cost-leadership-strategies.>. [Accessed on 22nd April 2019].

• Miller, B (2017)  Using HR as a Competitive Advantage.HR daily advisor [on line] Available at <https://hrdailyadvisor.blr.com/2017/08/21/using-hr-competitive-advantage/>[Accessed on 19th  April 2019].

• Tanwar, R (2013) Porter’s Generic Competitive Strategies. IOSR Journal of Business and Management, 15 (1), pp 11-17.