When a company is the first to market with a competitive advantage?
What is Competitive Advantage?Competitive advantage, as the name implies, is an advantage that a company or market participant has over other competitor market participants in a given function or industry. Plainly stated, it concerns the ability of a company to better provide a value proposition to consumers than competitors who provide the same or a similar value proposition. Show
Back to: Entrepreneurship Back to: STRATEGY & PLANNING What are Types of Competitive AdvantageCompetitive Advantage can be divided into two based on an analysis by Michael Porter. These two types can be further divided into two or three based on market segmentation.
The competitive advantage concept was developed by Michael Porter in 1980. This aspect was developed to deal with the issue of comparative advantage and absolute advantage which advised countries to produce only what they are good at. Comparative advantage could see countries only engaging in primary sector production which could lead to low wages and little wealth generation.
How Does Cost Leadership Lead to Competitive AdvantageA company is said to have cost advantage if it produces goods more efficiently with less costs than do competitors. Cost leadership strategy will be advised when:
Competitive advantage in costs come experience which is linked to learning:
How Does Product Differentiation Lead to Competitive Advantage?A company is said to have competitive advantage in product/service differentiation if it offers goods/services of better value/quality or with better attributes than those of competitors. In such a case, customers are willing to pay more for the goods/services. The more the sophistication of a product, the more the positive attributes, the better the competitive advantage in product differentiation. Product differentiation comes in handy when:
What are the Sources of Product Differentiation?
How Does Market Focus Lead to Competitive Advantage?The idea behind market segmentation is enable companies to learn the behavior of consumers when they are creating products or services. It tries to get companies to focus on selected markets instead of targeting all markets. Companies that target specific markets are able to meet the needs of their customers and this gives them a competitive advantage. To do this, most companies allow consumers to participate in the creation of products or services. What are the Drivers of Competitive Advantage?Competitive advantage generally arises in the following contexts:
What are Examples of Competitive Advantage?Examples of factors producing a competitive advantage include:
The important thing to note about competitive advantages is that they are rarely sustainable. That is most competitive advantages provide only a temporary benefit over other competitors. In any event, the effect of the above attributes or resources is to effect the power struggle between the forces identified by Porter. Some of these attributes or resources are sustainable and others are not. Strategic Management and Competitive AdvantageStrategic management is largely concerned with competitive advantage. That is, the strategic manager will plan and implement a strategy that seeks to establish, maintain, or grow the business's competitive advantage. The objective or intended result of those decisions are to exceed the profits or incur less loses than competitors. Sustained Competitive Advantage and StrategyMarkets are, by nature, competitive. Sustained competition tends to erode any advantage that one market participant has over others. This may happen because competitors copy the advantaged competitor, or the competitors create their own unique competitive advantage that outpaces others. So, competitive advantage is generally limited in time. Managers seek to maintain, establish new, and increase competitive advantage through strategic planning. This requires the manager to constantly assess the company, the value proposition, the market, the competitors, and the customer. The manager must develop new objectives, value propositions, and methods. Related Marketing Topics
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What are the 4 competitive advantages?The four primary methods of gaining a competitive advantage are cost leadership, differentiation, defensive strategies and strategic alliances.
What is meant by firstWhat Kind of First-Mover Advantage? A first-mover advantage can be simply defined as a firm's ability to be better off than its competitors as a result of being first to market in a new product category.
What does it mean for a business to have a competitive advantage?Your competitive advantage is the combination of marketing elements that sets your business apart. It's about the unique benefit customers get when they do business with you. Practical examples include: free home delivery. a money-back guarantee.
How do you know if a company has a competitive advantage?How to identify a competitive advantage. Technologies. Technologies used by the company to produce a good, to manage customer relations or to improve internal relationships can be considered a competitive advantage. ... . Brand awareness. ... . Customer service. ... . A punchy competitive advantage.. |