MEANINGAn advantage over competitors gained by offering consumers greater value than competitors offer .[A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. ]

STEPS IN IDENTIFYING COMPETITIVE ADVANTAGE

Direct Competition

Multiple businesses offering similar products and

services create direct competitionEXAMPLE- Dominos

& Pizza Hut are direct competitors as they both are

selling pizzas

Indirect competitors Businesses

that offer slightly

different products and services, but

target the same group of customers with

the goal of satisfying the same need. These are

sometimes also known as

substitutes. EXAMPLE – Mc

Donald is indirect

competitior for Dominos

IDENTIFYING CUSTOMRES

Assessing Competitors 1.Determinig competitors objective. (Profitability , technological leadership , market share growth , cash flow ,

customer service. 2.Identying competitors strategies. “ Competitive strategy is about being different. It means

deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.”

Cost LeadershipThe cost leadership strategy is typically only employed by large companies

that can obtain products cheaply through economies of scale. DifferentiationCompanies that use the differentiation strategy offer unique products or

services. Having a unique offering gives companies an advantage over their competitors because their competitors simply can't offer what they're offering. To develop unique products and services, companies often invest heavily in research and development

Low-Cost Focus The low-cost focus strategy is similar to the cost leadership strategy except

that it focuses on a niche market. Instead of marketing a product to the entire population it is marketed to a particular segment of the population. The aim of the strategy is to then be the cheapest provider in that segment.

High marketing & advertizement

Some Other Comparing Background. Background

◦ ownership, corporate governance, and organizational structure

Financials ◦ dividend policy, and profitability◦ various financial ratios, liquidity, and cash flow◦ profit growth profile; method of growth (organic or acquisitive)

Products ◦ products offered, depth and breadth of product line, and

product portfolio balance◦ R&D strengths◦ brands, strength of brand portfolio, brand loyalty and brand

awareness◦ patents and licenses◦ quality control conformance.

• Facilities• plant efficiency,• capital investment• location, shipping logistics, and product mix by plant

Marketing •segments served, •market shares, •customer base, •growth rate, •and customer loyalty•promotional mix, •promotional budgets,• ad agency used, •distribution channels used (direct & indirect)•pricing, discounts, and allowances•Personnel• number of employees, key employees, and skill sets•strength of management, and management style•compensation, benefits, and employee morale & retention rates•Corporate and marketing strategies• objectives, mission statement, growth plans, acquisitions, and divestitures•marketing strategies

Selecting Competitiors1.Strong or Weak CompetitorsThe company can focus on one of several classes of competitors. Most companies prefer to compete against weak competitors. This requires fewer resources and less time. But in the process, the firm may gain little. You could argue that the firm also should compete with strong competitors in order to sharpen its abilities. Moreover, even strong competitors have some weaknesses, and succeeding against them often provides greater returns.2.Close & Distant Competitors (Direct & Indirect Competitors)

3."Good" or "Bad" CompetitorsAn industry often contains "good" competitors and "bad" competitors.7 Good competitors play by the rules of the industry. Bad competitors, in contrast, break the rules. They try to buy share rather than earn it, take large risks, and in general shake up the industry.

Selecting Competitive StrategiesOverall cost leadershipDifferentiationCustomer intimacy(unique range of customer servicesFocusMarketing and advertising.Best in technology and other advancements.

Patanjali Ayurved Limited

Strengths & weaknessLoyal consumer base and competitive price - Baba Ramdev’s fanatic consumer base of about ~70 million has proved to be a great head start for him. This large fan base comes from an Ayurveda-freak nation and years of conducting yoga sessions. Further, Patanjali’s products are priced lower than their key competitors for price sensitive Indian consumers, who now see more “value” in Patanjali’s products.Appeal to rural-urban “aspiration and conservatism-driven” consumers - Apart from appealing to the above consumer base, Patanjali also managed to attract rural-urban “aspiration and conservatism-driven” consumers by launching modern consumer household products which promised purity with goodness, on the lines of major players.Anti-foreign campaigns – Time and again, Baba Ramdev raised voices to boycott “foreign” products, ranging from shampoos to colas, by showing their ill-effects. This further created a loyal consumer base that promoted word-of-mouth advertising for Patanjali and cleared ways for different product categories.Loyal employee structure– It is said that most of their employees are volunteers and, from manufacturing to selling, most of them do not take regular wages.No financial burden and minimal advertising budget – Baba Ramdev’s ~40 crore corpus, that he garnered from his Yoga shivirs, satellite television shows and donations, was utilised to kick start the empire. Further, Patanjali relies heavily on word-of-mouth advertising, with a few commercials (such as for cow’s ghee) to strengthen its brand identity and promiseMaintaining quality and brand promise – The key to buying any Patanjali product is quality and purity (possibly, that’s why its cow milk ghee’s sales forms ~50% of its revenues). This stands as a core brand promise.

Competitive StrategiesMarketing Strategies Targeted large market by focusing on economically and resources constraint

masses. Prepared database of the people visiting the yoga camp. Built powerful partnership with various prominent T.V channels to broadcast his

yoga camp world wide Create self esteem among his followers Baba has a vision to develop World’s largest food and Herbal Park. About7,000 people will get direct and about 200000 people will get indirect

employment opportunity through this project. An ever expanding product portfolio with brand extensions – Absence of a key sub-branded range under Patanjali “Umbrella” - Image driven branding –

Thank You For Your Attention!