Competitive advantages
1. Competitive advantage
A distinctive competence is a unique firm-specific strength that allows a company to better differentiate its products and/or achieve substantially lower costs than its rivals and thus gain a competitive advantage.
Resources are financial, physical, social or human, technological, and organizational factors that allow a company to create value for its customers.
Company resources can be divided into two types: tangible and intangible resources. Tangible resources are something physical, such as land, buildings, plant, equipment, inventory, and money. Intangible resources are nonphysical entities that are the creation of managers and other employees, such as brand names, the reputation of the company, the knowledge that employees have gained through experience, and the intellectual property of the company, including that protected through patents, copyrights, and trademarks.
Capabilities refer to a company’s skills at coordinating its resources and putting them to productive use.
2. The Value Chain value chain refers to the idea that a company is a chain of activities for transforming inputs into outputs customers value.
Primary Activities (research and development, production, marketing and sales, and customer service.)
Research and development (R&D) is concerned with the design of products and production processes.
R&D function can help to lower costs or raise the value of a product and permit a company to charge higher prices.
Production is concerned with the creation of a good or service.
MARKETING AND SALES
Through brand positioning and advertising, the marketing function can increase the value that customers perceive to be contained in a company’s product (and thus the utility they attribute to the product). Marketing and sales can also create value by discovering customer needs and communicating them back to the R&D function of the company, which can then design products that better match those needs.
A distinctive competence is a unique firm-specific strength that allows a company to better differentiate its products and/or achieve substantially lower costs than its rivals and thus gain a competitive advantage.
Resources are financial, physical, social or human, technological, and organizational factors that allow a company to create value for its customers.
Company resources can be divided into two types: tangible and intangible resources. Tangible resources are something physical, such as land, buildings, plant, equipment, inventory, and money. Intangible resources are nonphysical entities that are the creation of managers and other employees, such as brand names, the reputation of the company, the knowledge that employees have gained through experience, and the intellectual property of the company, including that protected through patents, copyrights, and trademarks.
Capabilities refer to a company’s skills at coordinating its resources and putting them to productive use.
2. The Value Chain value chain refers to the idea that a company is a chain of activities for transforming inputs into outputs customers value.
Primary Activities (research and development, production, marketing and sales, and customer service.)
Research and development (R&D) is concerned with the design of products and production processes.
R&D function can help to lower costs or raise the value of a product and permit a company to charge higher prices.
Production is concerned with the creation of a good or service.
MARKETING AND SALES
Through brand positioning and advertising, the marketing function can increase the value that customers perceive to be contained in a company’s product (and thus the utility they attribute to the product). Marketing and sales can also create value by discovering customer needs and communicating them back to the R&D function of the company, which can then design products that better match those needs.