Competitive Advantage

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A competitive advantage is an advantage over competitors gained by offering consumers greater value either by means of lower prices or by providing greater benefits and services that justify higher prices.

Competitive strategies

1. Differentiation-this involves selecting one or more criteria used by buyers in a market. It is about charging a premium price that more than covers the additional production cost and about giving customers clear reasons to prefer the product over other, less differentiated products

2. Cost leadership-the objective is to become the lowest cost producer in the industry.

3. Differentiation focus strategy- a business aims to differentiate with just one or a small number of target segments. The special customer needs of the segment mean that they are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers.

4. Cost focus-here a business seeks a lower cost advantage in just one or a small number of market segments. The product will be basic perhaps a similar product to the higher price and featured market leader but acceptable to sufficient consumers.


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