The purpose of this thesis is to introduce the competitive advantage strategy into heritage management within tourism and general development on the basis of differentiation. It is suggested that, if heritage is perceived as the competitive advantage in the development process of a region or nation, sustainable conservation can be achieved, as tourism and general development will depend on the existence and maintenance of heritage. Heritage is not treated as an attraction by nature but as the main resource/input on the basis of which a product might be created, called destination. Furthermore, operational management of heritage is integrated into strategic management introduced in this thesis. The differentiation of a destination lies primarily in the uniqueness of heritage itself. However, it is advocated that differentiation can be further developed through the localisation of the process, which means the incorporation within it of cultural and other differences or values. To incorporate these within the strategic management procedure, participatory methods are needed. Consequently, it is suggested that the competitive advantage strategy be applied, based on differentiation through the values and significance assessment system. Lastly, it will be argued that in a long term managerial policy, such as the one proposed in this thesis, achieving sustainable conservation through development has a higher probability of success by shifting responsibilities to the public. The lack of a precedent managed in this way has necessitated the creation of a case-study, a strategic management model for a region in southern Greece, called Mani. This region is rich in cultural heritage but has been largely abandoned by its inhabitants. The different aspects to be taken into consideration and the urgent need to save Mani's heritage have been the reasons for its selection. The result is a strategic management and development plan for Mani and a paradigmatic strategic model for further cases internationally.