competitive advantage
(noun)
Something that places a company or a person above the competition.
Examples of competitive advantage in the following topics:
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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.
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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
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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.
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Other Inputs to Pricing Decisions
- In other words, a company can utilize its competitive advantage to implement a pricing strategy that will maximize its profits.
- Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
- Achieving competitive advantage strengthens and positions a business better within the business environment.
- This suggests that the differentiation value relative to the closest competitive offering is $6,000.
- Combine the concept of customer needs, the competitive environment as well as legal and regulatory factors.
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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.
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Status Quo
- Price wars are intense competitive rivalries characterized by a multilateral series of price reductions.
- In the short term, price wars are good for consumers, who can take advantage of lower prices.
- A small firm can avoid a price war by setting prices in line with its competition.
- Charging what the competition is charging can be quite popular in cases where costs are difficult to measure or where the response of the competition is uncertain.
- Its major advantage is that it requires little planning, as it's a relatively passive policy.
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Price Competition
- With competition pricing, a firm will base what they charge on what other firms are charging.
- The keys to implementing a strategy of meeting competitive prices are an accurate definition of competition and a knowledge of competitor's prices.
- Banks shop with competitive banks every day to check their prices.
- Pricing above competition generally requires a clear advantage on some nonprice element of the marketing mix.
- Price wars usually occur when a business believes that price-cutting produces increased market share, but does not have a true cost advantage.
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Competitor-Based Pricing
- Competition-based pricing describes a situation where a firm has a pricing policy that reflects the pricing decisions of competitors.
- Competition-based pricing describes the situation where a firm does not have a pricing policy that relates to its product, but reflects the pricing decisions of competitors.
- Similar to competition based pricing, going rate pricing reflects the price that is being used by most of the companies within the industry, an industry standard more or less.
- In fact, it is sometimes referred to as the "follow the leader strategy. " Its main advantage is ease of use.
- The problems with competition-based pricing are that:
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Competition
- Companies must conduct competitive analysis to identify their competition accurately, and must avoid defining the competition too narrowly.
- Competitive analysis focuses on opportunities and threats that may occur because of actual or potential competitive changes in strategy.
- Competitive analysis starts with identifying current and potential competitors.
- Entering an international market is similar to doing so in a domestic market, in that a firm seeks to gain a differential advantage by investing resources in that market.
- Classify the use of competitive data from an internal and external viewpoint
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The Global Economy
- Increased global competition, financial flows and internet technologies are some of the driving forces behind global marketing strategies.
- Companies recognize that worldwide competition, international marketing trends, and Internet technologies must be considered when launching campaigns both domestically and internationally.
- Oxford University Press defines global marketing as "marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives. " The global economy certainly provides advantages to companies wanting to increase revenues and expand their brand.
- Placement: Product distribution will also be determined by local and global competition, as well as the product's positioning in the marketplace.
- These advantages include: