Michael Porter Theory

Michael Porter’s video discusses how to gain competitive advantage and in the market place using specific strategies. Competitive advantage is the positioning of a company in its competitive environment. The starting point to have superior competitive advantage is to “improve faster than the competitors can catch up”, and this requires strategies. One of the strategies is broad differentiation which is defined as having a unique benefit over the competition. In other words you need to market a product or service that customers think is important and identifying with the number of different needs that the customers have. American Airlines uses this strategy and it works very well for them because they know what their customers want and what they don’t want. This airline knows that their passengers have to be somewhere and in a timely fashion, so they don’t have time to be delayed or rerouted. Customers are important and vital to their survival. American airline also differentiates themselves from their competitors by advertising and by reward programs. Another company that uses the broad differentiation strategy is U.S. Cellular. They stress services that are relevant to building relationships with their customers. They provide services for people with unique needs and also offers accessories for their customers. Easy access for their customers allows customers to shop on the Internet or go to their local business location. They also advertise their products in shopping malls and Super Wal-Mart. This wireless service communicates the value of their customers through marketing strategies. Through advertising they also stress the quality of their services. Companies like United Sates Cellular and American Airlines have to be thinking ahead of the curve in today’s market. Competitors are competing and like Michael Porter said “you have to be one step ahead of your