Assignment on the Competitive Advantage

Competitive advantage: I have read all of the lectures material which is completely based on the business level strategies. There are different types of strategies related to business discussed in the lectures but my chosen topic from such business strategies is the competitive advantage. The reason of selecting this topic is that every business and company always focusing to acquire highly competitive advantage in the market. In my opinion, the competitive advantage strategy is more effective than others topics mentioned in the lectures because it purely concerns with growth of the organizational business. So, that’s why I am reflecting on this topic and the complete reflection is mentioned below.

Competitive advantage is considered to be the most crucial challenge for a business strategy to achieve sustainable competitive advantage in contrast to other firms in the market. It is defined as an attribute for a company that outperforms the viable competitors in the industry in same generic products or services. It is rather an advantage over other competing companies by offering greater value to customers through productive benefits like lower prices and justified product quality in contrast to higher priced products offered by competitors and to gain superior marginal benefits to generate value for shareholders and the company itself. A competitive advantage that’s easily copied by other companies is not even considered a reliable competitive advantage.

There is no single measure or factor to that contributes towards the calculation of competitive advantage for the company, rather there are many factors such as return on assets, brand reputation, valuable resources and high profit margins. To efficiently achieve competitive advantage, the simplest way used by companies is cutting the costs low and making the prices lower from their rivals so that more customers can be attracted.

Examples of competitive advantage:

·         Brand image identification

·         Exclusive geographic location

·         Skillful labor

·         Proprietary technology

·         Easy access to natural resources

·         Lower cost manufacturing

·         Construction of competitive advantage

Following factors needs to be focused on for successive competitive advantage:

As working in the market, there is need to gain competitive advantage in the market so that it could be helpful for earning as well as for strategic planning in the market. Followings are the factors that could be helpful in gaining competitive advantage in the business:

Ø  Target market –target audience to be catered for purchasing from the company

Ø  Benefits –clear evaluation of benefits for interest generation and real value

Ø  Competitors –understand who the competitors are in your industry landscape

I choose this topic as I considered that in any kind of business, there is basic element to attain competitive advantage in the market, and therefore we must have complete knowledge about it.

A company should evaluate its upper seized opportunities in contrast to competitors with faster changing organizations that can attain superior PEST benefits from other companies and understanding how your competitor companies are responding to those factors. Whereas, PEST stands for political, economic, socio-cultural and technological factors that a company should evaluate before hand or with consistent functionalities of the organization’s procedures to attain hold on external environment. The change in these factors very effectively change the opportunities for growing system of the firm that can eventually exploit the organization’s matters against its competitors e.g, deploying new equipments and machinery with more effective manufacturing capabilities can increase the production rate and can reduce the net costs which can ultimately reduce the consumptions costs for users making customers more attracted towards your firm than others. This also shows a contrast between different companies using different resources that can make it achieve valuable products and services at lower costs.

VRIO resources should effectively be implied in internal matters of the organization for smooth functioning of processes required for unique competencies in a way that can achieve innovative products or services as compared to competitors. This makes the company to analyze and implement those factors for internal environment with integration of culture, reputation, copyrights, brand equity, trademarks and patents to serve as intellectual property and all of these internal factors can be achieved smoothly through valuable, rare, hard to imitate and organized (VRIO) factors that makes a company to earn edge over other company through its systematic use.

An organization also needs to analyze two of the main factors for authentic competitive advantage as:

Ø  Unique competencies: It is the ability used for successful performance of tasks that works in cognition with multiple skills, capabilities, knowledge and various processes and a company has to attain these competencies for temporary advantages so that replication can be minimized.

Ø  Innovative capabilities: Innovation is a key factor to earn competitive advantage through such processes that can initiate the manufacturing of technological and innovative products to bring companies an edge over other competitive companies and to be in trend demanded by customers.

This step of company is also helpful in strategic planning as the company which is earning competitive advantage from many time period, is also eligible to gain the strategic implementation of these activities to gain long term benefits.