http://www.csustan.edu/manage/harris/MBA4.html
The article points out the following sources for competitive advantage:
- Highest Quality Product
- Superior Customer Service
- Achieving Lower Costs than Rivals
- More Convenient Geographic Location
- Better Performing Product
- Better Value Product (Quality, Service, Price
One way that companies can achieve a competitive advantage is through the business strategy of Cost Leadership. In order to achieve a cost leadership strategy, firms must do the following:
- Sustained capital investment and access to capital
- Process engineering skills
- Have intense supervision of labor
- Products designed for ease of manufacture
- Low-cost distribution system
- Tight cost control
- Frequent, detailed cost reports
- Avoid marginal customers
- Tight control on cost
Another generic business strategy that firms can use to achieve a competitive advantage is Differentiation. In order to achieve differentiation, firms must do the following:
- Structured organizational responsibilities
- Strong marketing abilities
- Product engineering
- Creative flair
- Strong capability in basic research
- Corporate reputation for quality or technology
2 comments:
The use of these strategies has helped many companies, including my fathers, to gain the competitve advantage that is needed to succeed in todays hectic business environment.
All of the business strategies discussed in this article make excellent business sense. Unfortunatley for today's consumer, it appears as though superior products are not necessarily the goal as a means to have people buy ones product vs. competition. To the contrary service contracts are tremendous revenue producers. Therefore, it is more advantageous for companies to sell things that will malfunction over a certain period of time so that consumers are forced into the lucrative service contracts.
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