Competitive Advantage. Businesses look to gain advantage over their competition in the eyes of the...
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Transcript of Competitive Advantage. Businesses look to gain advantage over their competition in the eyes of the...
Competitive Advantage
• Businesses look to gain advantage over their competition in the eyes of the consumer
• Some may be • Sustainable• Continues over time
• Non-sustainable• Easily replicated
Competitive Advantage
Sustainable Competitive Advantage
• Hold Customers Despite Competition• Examples– Unique Selling Proposition (USP)– Lowering Production Costs– Servicing a Niche Market– Creating Customer Loyalty
Unique Selling Proposition (USP)
– something that no one else has– ex: patents• No one can replicate you idea/design
Unique Selling Proposition (USP)
Low Production Costs– reducing costs to create or deliver
products– Finding a way to run your business in a
cheaper way than the competition– ex: new technology to make product
more cheaply
Lowering Production Costs
Servicing a Niche Market– finding a specific market that others
have difficulty serving– ex: specialized software– ex: referee whistles
Servicing a Niche Market
Creating Customer Loyalty– customers can be loyal to brand,
product retailer, etc.– You go back time and time again • Because of a variety of reasons
– Trust the people, like the style, havn’t done you wrong in the past, friendly employees, etc.
– ex: a customer may buy the same brand of shoes each time
Creating Customer Loyalty
Non-Sustainable Competitive Advantages
• Shifts customers from the competition• The shift is only temporary and can be replicated• Examples:– Promotion– Placement– Quality– Benefits of use– Design features
Promotion– advertising is almost always required– top-of-the-mind awareness– ex: “Roll Up The Rim To Win”
Promotion
Placement– need to get product to customer– stores, cities, corners– The competitor that can find the easiest
way to deliver the product/service often wins
– ex: big retail stores that wipe out the competition are called category killers
Placement
Quality
– best, easiest to use, lightest, etc.– Certain businesses will push that their
product is the best quality and that’s why you should give them their business
– ex: Ferraro Rocher
Quality
Benefits of Use– marketing the product based on what it
does– “Your life will be better because of this
product or service”– ex: if you buy the ps3 vs the xbox 360 –
you can easily stream videos wirelessly from you PC to your TV
Benefits of Use
Design Features
– features that are different between products
– Example: What smartphone A does vs. smartphone B
– ex: color, shape, extra buttons, etc.
Design Features
Today & Tomorrow’s Work• Open “Competitive Advantage
Assignment”