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