competitive advantage

Examples of competitive advantage in the following topics:

• Competitive Advantage

  • Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
  • Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
  • Competitive advantage seeks to address some of the criticisms of comparative advantage.
  • Michael Porter proposed the theory of competitive advantage in 1985.
  • The 640GB drive has a competitive advantage over the 500GB drive in terms of both cost and value.

• Multiple Sources of Advantage

  • One of the main goals of marketing planning and strategy is to produce multiple sources of competitive advantage in the marketplace.
  • For most businesses, one of the primary goals of implementing a marketing strategy is producing multiple sources of competitive advantage.
  • Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors.
  • Products that use cutting-edge robotics and information technologies can act as a source of competitive advantage for a company.
  • As a result, businesses can gain a competitive advantage by building a compelling and visually appealing website or social media business page.

• The Resource-Based View

  • To transform a short-run competitive advantage into a sustained competitive advantage requires that these resources are heterogeneous in nature and not perfectly mobile.
  • In many ways, business strategy aims to achieve competitive advantage through the proper use of organizational resources.
  • In achieving a competitive advantage, the resource-based view defines characteristics which make a competitive process sustainable.
  • Inimitable – If a valuable resource is controlled by only one firm, it can be a source of competitive advantage.
  • Describe the intrinsic competitive advantage defined by the resource-based view strategy

• Sustainable Competitive Advantage

  • Competitive advantage is gained when a firm acquires attributes that allow it to perform at a higher level than others in the same industry.
  • It is an advantage (over the competition), and must have some life; the competition must not be able to do it right away, or it is not sustainable.
  • Superior performance is the ultimate, desired goal of a firm; competitive advantage becomes the foundation.
  • When all four of these criteria are met, then a firm can be said to have a sustainable competitive advantage.
  • Demonstrate the ideology behind a sustainable competitive advantage from a marketing perspective

• Combining Internal and External Analyses

  • Using combined external and internal analyses, companies are able to generate strategies in pursuit of competitive advantage.
  • Organizations must carefully consider what internal assets will differentiate them from the competition, within the same competitive environment.
  • Similarly, organizations must understand the context in which they operate if they aspire to acquire competitive advantage over other incumbents.
  • Using context analysis, alongside the necessary external and internal inputs, companies are able to generate strategies which actively capitalize on this knowledge in pursuit of competitive advantage.
  • This melding of internal and external factors in pursuit of competitive advantage is an ongoing process, as the company must evolve and change in concert with the environment.

• Competitive Intelligence

  • Competitive Intelligence (CI) is a hybrid process of marketing research and strategic analysis that can give companies a competitive advantage.
  • An example of competitive intelligence is when a food and beverage company conducts primary research to find out about the latest trends in the beverage industry of a foreign country.
  • Although the term CI is also considered synonymous with competitor analysis, competitive intelligence extends beyond analyzing competitors.
  • There are many synonyms for competitive intelligence such as business intelligence, market intelligence, and corporate intelligence.
  • In essence, CI is a hybrid process of marketing research and strategic analysis that ultimately seeks to provide companies and their products with a competitive advantage in the marketplace.

• Defining Comparative Advantage

  • However, the accompanying table shows that Chiplandia has a comparative advantage in computer chip production, while Entertainia has a comparative advantage in the production of CD players.
  • It is important to distinguish between comparative advantage and competitive advantage.
  • Unlike comparative advantage, competitive advantage refers to a distinguishing attribute of a company or a product.
  • For example, having good brand recognition or relationships with suppliers is a competitive advantage, but not a comparative advantage.
  • Chiplandia has a comparative advantage in producing computer chips, while Entertainia has a comparative advantage in producing CD players.

• The Challenge of Competition

  • Managers must understand a company's competitive advantage and build a strategy that takes into account the competitive landscape.
  • Avoiding the risks of competitive factors demands a strong understanding of operational efficiency (low cost), quality production, differentiation, and competitive advantage—or who you target and whether or not you have a cost or quality advantage (see figure below).
  • Managers must understand their own competitive advantage (what they do better than the competition) to adopt the appropriate competitive strategy to gain market share and remain profitable.
  • Companies generally achieve either a cost or a quality advantage (very rarely, both).
  • Describe competitive strategies such as low cost, differentiation, and internal competition and the role of the external competitive landscape in developing them

• Summary and references

  • Competitive Intelligence Review; Volume 12, Issue 4: 25 – 38.
  • "Competitive intelligence revisited: A history, and assessment of its use in marketing".
  • Competitive Intelligence Review, 5, 4: 23-31.
  • "Strategic value analysis for competitive advantage".
  • Competitive Intelligence Review, 10, 2: 52-6.

• Nonprice Competition

  • Non-price competition involves firms distinguishing their products from competing products on the basis of attributes other than price.
  • Since price competition can only go so far, firms often engage in non-price competition.
  • The firm can also distinguish its product offering through quality of service, extensive distribution, customer focus, or any other sustainable competitive advantage other than price.
  • Non-price competition may also promote innovation as firms try to distinguish their product.
  • Although any company can use a non-price competition strategy, it is most common among oligopolies and monopolistic competition, because these firms can be extremely competitive.