Provided that the primary objective of strategy is to achieve a sustained competitive advantage, it is important for manager to understand its sources. The competitive advantage has four building blocs: efficiency, quality, innovation and customer responsiveness. Each is the result of the way the various value-chain activities are performed. All these factors are hugely interrelated to the distinctive competence - the resources which are valuable, rare, inimitable and well organized. The resources with these characteristics are more likely to constitute the unique strengths of organizations thus a special attention need to be paid to them during the strategy formulation process. The analysis of the financial performance and profitability is another important consideration when formulating strategy. Hence, manager should perfectly understand the relationships among value, pricing, demand and costs in order to be able to maximize the competitive advantage and sustain it over time.