competitive advantage
INTRODUCTION
Competitive advantage(CA) is an advantage competitors gain by providing or offering customers or consumers greater value for their money through product and service differentiation or through lower prices. Maintaining competitive advantage is crucial to many businesses or organizations' success in order to survive in the market. Competitive advantage is characterized by superior performance which could be an attribute to outperform the competitors whether current or potential; or gaining a higher market share in a particular industry thereby ensuring market leadership; or ultimately, maximization of profit.(JOBBER 2010)
This essay will critically analyze how competitive advantage is created i.e. Porter's 3 generic strategies: differentiation, cost leadership and focus: giving theories and practical examples. It will examine the essence of choosing a competitive strategy that best suits a business. Furthermore, the sources of CA and how to sustain it will be discussed.
A company cannot just boast of providing superior performance or quality, it has to actually deliver the said quality and the customers or consumers have to be able to perceive and see it as well, which is what sets it apart from other products. (KOTLER and ARMSTRONG)
Strategies For Creating Competitive Advantage
Jobber(2006)said that there are four generic strategies to achieving competitive advantage: differentiation, cost leadership, differentiation focus and cost focus. Closely related is Michael Porter's (1985) generic strategies which are differentiation, cost leadership and focus- which combines Jobber's differentiation focus and cost focus. For the purpose of this essay, Porter's strategies will be examined
Differentiation
This is the establishment and delivery of a distinct and unique product which is of great value to consumers. Although the product or service is not cheaper than its competitors, the price is also not too high that the consumers are not willing to pay
Competitive advantage(CA) is an advantage competitors gain by providing or offering customers or consumers greater value for their money through product and service differentiation or through lower prices. Maintaining competitive advantage is crucial to many businesses or organizations' success in order to survive in the market. Competitive advantage is characterized by superior performance which could be an attribute to outperform the competitors whether current or potential; or gaining a higher market share in a particular industry thereby ensuring market leadership; or ultimately, maximization of profit.(JOBBER 2010)
This essay will critically analyze how competitive advantage is created i.e. Porter's 3 generic strategies: differentiation, cost leadership and focus: giving theories and practical examples. It will examine the essence of choosing a competitive strategy that best suits a business. Furthermore, the sources of CA and how to sustain it will be discussed.
A company cannot just boast of providing superior performance or quality, it has to actually deliver the said quality and the customers or consumers have to be able to perceive and see it as well, which is what sets it apart from other products. (KOTLER and ARMSTRONG)
Strategies For Creating Competitive Advantage
Jobber(2006)said that there are four generic strategies to achieving competitive advantage: differentiation, cost leadership, differentiation focus and cost focus. Closely related is Michael Porter's (1985) generic strategies which are differentiation, cost leadership and focus- which combines Jobber's differentiation focus and cost focus. For the purpose of this essay, Porter's strategies will be examined
Differentiation
This is the establishment and delivery of a distinct and unique product which is of great value to consumers. Although the product or service is not cheaper than its competitors, the price is also not too high that the consumers are not willing to pay