IDENTIFYING COMPETITIVE ADVANTAGES

DEFINITION

Competitive advantage is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor

Competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage

When an organization is the first to market with a competitive advantage, it gains a first-mover advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

Organizations watch their competition through environmental scanning where it is the acquisition and analysis of events and trends in the environment external to an organization

The ways to develop competitive advantage in industry

Porter’s Five Forces Model

POSTER’S THREE GENERIC STRATEGIES

VALUE CREATION

Organizations frequently face a decision as to whether to enter a new industry or industry segment

Threat of new tenants

Threat of substitute products or services

Supplier power

Rivalry among existing competitors

Buyer power

Is about ways of competing

Broad Differentiation

Focus Strategy

Broad Cost Leadership

Producing and marketing a good quality product / service at a lower cost than your competitors

Creating a product / service that is perceived as being unique “throughout the industry”

Addressing a “focused” segment of the marketplace, product from / cost management process

Once an organization chooses its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategy

To examine their activities & find competitive opportunities

They can know which are the activities is success and which is fail

Competitive advantages

Target high value-adding activities to further enhance their value

Target low value-adding activities to increase their value

Perform some combination of the two