Competitive advantage could simply be defined as the advantage or ability of a firm to have competitors in the industry; or the firm’s ability to outperform its competitors in the industry.
It is said that a firm has a competitive advantage when it has the ability or the means to crowd out its competitors in pursuit of customer favor. This applies both internationally and locally, as well as to both services and products. Thus, a sustainable competitive advantage is consistency in which a firm applies the long-term efforts of competitors or potential participants to copy or overtake them. Therefore, sustainability means that strategic assets are inaccessible to others and imperfectly mobile. This will be discussed later.
Porter (1990) argues that, although not all countries are at the forefront of competition, the main nation that forms a competitive advantage is the starting point for a firm’s competitive advantage, and from which it should be supported. However, in any field of activity, the creation of competitive advantages must be a choice of management, and it must really correspond to the achievement of results. It should be noted here that competitive advantage can usually be attributed to one of three roots:
Excellent resources, excellent skills and excellent positions.
Competitive strategy is one of the ways in which a business is related to its environment through competitiveness with other firms that are also trying to adapt within the operating environment. With this aspect - a competitive strategy, which, if properly selected and implemented, gives the company a competitive advantage.
It should be noted here that the prescriptive view of strategic planning emphasizes the importance of the organizational environment as a source of threats and opportunities, as well as the need for effective responses of the organization, if survival were guaranteed and the success achieved. The answer is later formulated in a plan that formulates major decisions about entering new markets or developing new products and services, guided by their goals. In the 1980s, under the influence of Porter’s works, the focus shifted from a plan to choosing an appropriate overall strategy for positioning a business unit in a competitive environment. Porter, arguing that the environment poses threats and partnership opportunities than with trends and events, suggested analyzing the environment using an analysis of five forces to identify problems that affect the level of competition in the industry; after which a strategy is formed to combat it.
The resulting strategy, which he called generic, was distinguished by some strategic options that a firm may have:
Cost Management: A business can position itself as offering a low-cost product as a standard price, that is, a cost management strategy. Costs are reduced on each element of the value chain. Manufacturers can take advantage of greater profits than competitors. Toyota is a good example of an organization that produces high-quality cars at a low price combined with brand and marketing skills to use price premium policies.
He could offer a product different from what the rivals offered. Those. differentiation. This allows companies to make prices less sensitive and focus on cost, which creates a relatively higher price and better margins. Although additional costs will be incurred as a result of the difference, it is possible that this will be offset by an increase in sales revenue.
Focusing on a small but clearly defined part of the market, for example, a specific group of customers or a product area or geographic area. Also known as a niche, it is usually suitable for a small company, that is, a focus strategy.
A common competitive strategy, usually used after a competitive analysis or as a response to a competitive advantage, is defined as the basis on which a strategic business unit (SBU) can reach or withstand competitive advantage in its market. (Johnson and Scholes, 5th edition.)
Based on Porter's general competitive strategies (1980), Bowman et al. Claim that organizations achieve competitive advantage by providing their customers with what they want, or need more effective or efficient than competitors, and make it difficult to imitate competitors. This was later developed into five general strategies that would be used in this discussion. Thus, common competitive strategies are fundamental activities in which the SBU seeks to achieve a solid advantageous position in its environment and get the benefit of stakeholders by meeting the expectations of customers, users or other stakeholders.
Below are Bowman’s Five-generic competitive strategy options and examples of organizations that have used them to gain competitive advantages: no-frills strategies, low-price strategies, hybrid strategies, differentiated strategies and value-added or differentiation strategies.
In short, a no-nonsense strategy combines low price, low perceived value added, and targets the price-sensitive market. A no-nonsense strategy is now a popular strategy with low-cost airlines Easy Jet and Ryanair seek to enter the aviation industry to compete with the likes of Virgin, and are the determining factor in the market. This, therefore, gives the firm the necessary competitive advantage over competitors who charge a higher price. This strategy is successful because there may be a market segment that does not take into account the poor quality of the goods, provided that it fulfills the same goal.
To gain a competitive advantage without using any strategy, revenues must increase, and the product really needs to be price sensitive. Easy Jet's frill strategy seems to be going well, as a result of the cost saving methods they use. For example, there are no tickets, no ticket agents, no in-flight food and drinks for customers, and no flights on short flights. Now almost all supermarkets in the UK do not use excesses strategies by introducing their own brands, the price of which has been reduced to attract customers in order to gain a competitive advantage.
The next overall strategy is a low price strategy. This strategy pursues a lower price than it has to do with the market, while at the same time trying to maintain a similar value of a product or service, like the one offered by competitors. There is a potential price war among competitors, and in the long run, consumers are likely to lose because firms will not be able to support a lower price strategy. Despite the price war and low profitability, there are some proposed ways in which a low price can lead to competitive advantages for firms. The market segment should be sensitive to low prices, and SBU has an advantage over competitors.
However, in practice, a lower pricing strategy, usually bought at the expense of lower transaction costs, does not give the firm a competitive advantage if the firm cannot sustain it in the long run, because more firms are currently entering the market due to low or absent entry barriers. such as small capital requirements, and how effective employees are.
Hybrid competitive strategy is aimed at achieving the difference and prices are lower than competitors at the same time. This is not an easy strategy, because for differentiating a product or service, it means some money and costs associated with the fact that a low price seeks to reduce. This strategy is suitable for the DIY industry, since Robert Dyas cannot stand the competition. The success of this depends on providing unique, more efficient products or services for consumers, while at the same time working at a lower price in order to lower their price below the industry level. The success of this strategy can be further aggravated if the firm has a scale effect and can increase sales more than its competitors, thereby reducing its base cost. Mark Asda George is an example of an overall hybrid strategy in the SBU.
Another strategy is a differentiation strategy. It aims to provide products or services that are completely different from those of its competitors by adding features rated by consumers. The main purpose of using this is to either maintain market share or increase market share compared to its competitors. A striking example of this is the larger fuselages of aircraft manufacturers Airbus, the cockpits intended for use in more than one aircraft, rather than mechanical flight controls.
These features helped Airbus win customers, such as the New York Jet Blue; although Jet Blue is staffed by former Boeing employees. (Fortune, Europe Edition 22 November 17, 2003, pp34). This strategy could be used to achieve competitive advantage, which is the ultimate goal of a firm that invests more in R & D, unique projects and functions. Marketing approaches in terms of good marketing communication (for example, advertising products or services), as well as the brand's ability to win customer loyalty. (Airbus example)
The fifth overall competitive strategy is a focused differentiation strategy that aims to provide high perceived value; substantiation of the main price premium, as a rule, to the selected market segment. It is usually adopted to resist or compete with others in a seemingly similar segment. It could be argued that purposeful differentiation is simply an extension of any of the four strategies that have so far been considered depending on the competitors in this new segment, which is usually from medium to high income. A good example is the introduction of Lexus in 1989 by Toyota to compete with other luxury brands of BMW and the new Mercedes Benz series.
For a focused differentiation strategy that will be used to gain a competitive advantage over competitors in the industry, the business unit must find ways to make products more efficient in order to be able to transfer savings to customers. The business unit must identify new segments and must also be prepared to aggressively create a new market segment, where it is believed that the first engines have a huge advantage. Again, Toyota is proud to be the first to introduce the brand, a scion, especially for young buyers in January 2003, which was successful and introduced hybrids in 1997, selling 127,000 much more than Honda. (The Hybrid uses two engines and is environmentally friendly. ”(Fortune, Europe Edition, Number 24, December 22, 2003, p. 57).
The essence of the various strategies discussed so far is to create or add value to the products or services in order to provide the client with improved or sufficient satisfaction so that the firm gains a competitive advantage over its competitors. However, one thing for a firm is to gain a competitive advantage, and the other is to maintain the competitive advantage obtained in this way. Therefore, when a firm can gain a competitive advantage over its competitors, it is advisable to try to maintain this advantage.
Some of the ways to maintain competitive advantage is what is described as an insulating mechanism. This is the use of forces, such as imitation barriers, which limit the amount in which a competitive advantage can be duplicated or compared, or even, perhaps, abandoned other firms' resource creation activities. Although in principle this is similar to an input barrier, whereas entrance barriers protect the profitability of the entire industry, insulating mechanisms maintain the competitive advantage of one firm. For example, legal barriers such as trademarks, patents, or intellectual property rights, as in the case of Microsoft.
This may also be due to the fact that a leading firm makes it difficult for a competitor to catch up with proprietary technology, because it entered the market earlier and continues to research and may be able to move to an excellent position by the time its competitors catch up. This is known as the advantage of early movement. As the business unit entered the market earlier, past market success is believed to support the firm.
Nevertheless, no matter how discrete the strategy adopted to obtain a sustainable competitive advantage or sufficient satisfaction that a client can receive, as well as the mechanisms created to maintain a competitive advantage, simple economics has proven that human needs are insatiable and with the age of information technology in business, the dynamism is improving that products and services can become stale before they even reach the next user.
The question is, can a firm continue to create more economic value than its competitors than then?
Now with the advent of information systems and technologies, this traditional way of competitive advantage or competitive advantage has thus changed. Information gathering, and I mean that the competitive collection of information can in fact to some extent change the position of the firm in the industry and, in this respect, affects its competitive advantage in one way or another.
A good and recent example is the installation of Asda's Radio Frequency Identification System (RFID), which can be used to scan barcodes of incoming goods, which can save Asda $ 8.35 billion annually by improving supply chain management. Fortune, Wal-Mart saves changes, November 10,2003pp 23.
Firms can either use their own database or software to collect information to track their operations and obtain necessary information, such as inventory, customers and competitors' trends. productivity and high-speed products for the formation of their strategies or the formation of so-called information partnerships for the purpose of exchanging information for gaining competitive or strategic advantages; and even link their systems with some competitors to achieve synergy.
This becomes important as a result of the fact that competition in the business world today is not only in a particular industry that works, but can also be cross-competition with people in other related industries, such as universities and publishers, because of advanced and reverse integration, It is known that Baxter Healthcare International offers its customers medicines from its competitors and office supplies through its electronic order. By doing this, the company increases its customer base, and also increases the loyalty of its customers.
In this joke, the claim that “there is no such thing as a sustainable competitive advantage” can be seen in connection with the circumstances that occurred at Sears, which used to be the largest US retailer until Wal-mart overtook it after The diversification strategy has subsided, despite the fact that it (Sears) has been computerized with greater costs in information technology and networks than all other non-computer companies in the United States other than Boeing. So why this huge amount in computers and networks could not give them a competitive advantage over competitors? This is due to the fact that one equipment is not enough to provide the necessary information without its integration with the appropriate software? Sears did just that.
Trying to invent himself, Sears began to study almost all strategies, including low pricing strategies, postponements, improved marketing gimmicks, and also embarked on a five-year renovation of a $ 4 billion store to make stores more attractive. All to no avail.
Then Sears noticed that his buyers of goods do not have reliable information that buyers bought at every store. Management relied on 18 separate systems that often have confusing and redundant pricing information. They could only see the daily performance of the unit. That was bad for Sears. Then, Sears re-consolidated its position over the business by building a large database, including consolidating information about transactional records, 90 million households, 31 million Sears & # 39; пользователей карт, их кредитного статуса и других связанных данных.
В базе данных находится система отчетности о стратегической эффективности компании (SPRS). Теперь Sears & 1000 покупателей и менеджеров знают, какие горячие продажи пополняются сразу же. Этот конкурентный сбор информации для спасенной помощи превращается в Сирса. Его продажи в магазинах начали расти и планировали вступить в партнерство с AOL, чтобы повысить его онлайн-бизнес, нацелив 21 млн клиентов AOL на разработку контента для AOL по таким предметам, как сбор колоды, советы по декорированию дома и другие улучшения дома темы; а также перевести своих поставщиков в электронную систему заказа, аналогичную описанной для Baxter Healthcare, путем непосредственного связывания ее компьютеризованной системы заказов с каждой из поставщиков, чтобы полностью исключить бумагу для улучшения потока товаров в свои магазины.
Как обсуждалось ранее, если фирма может сохранить или сохранить лидерство в создании ценности, использование стратегических активов, например доступ к эффективным каналам сбыта, поддержание позиции на рынке и может быть низким издержками, тогда можно сказать, что оно имеет устойчивое конкурентное преимущество. Это абсолютно невозможно в этом динамичном деловом мире. Самая сложная часть этого заключается в том, что фирма должна время от времени создавать большую экономическую ценность, чем ее конкуренты. Будут ли его конкуренты смотреть, не делая ничего?
Microsoft, например, тратит миллиарды долларов на разработку собственной поисковой системы, которая будет включена в его онлайн-сервис MSN и его новую операционную систему в 2006 году для борьбы с доминированием Google в индустрии поисковых систем. (Fortune, 22 декабря 2003 года, стр. 17).
По моему мнению, исходя из обсуждений выше, если действительно устойчивое конкурентное преимущество заключается в сохранении способности фирмы превзойти свою отрасль, то достаточно сказать, что, как и сбор и использование конкурентной информации, как показано на Сирс. история выше может дать твердое (устойчивое) конкурентное преимущество, действительно трудно, если не невозможно, выдержать какое-либо конкурентное преимущество в течение очень долгого времени. Это происходит из-за скорости технологических изменений, изменений в бизнес-стратегиях и того факта, что клиенты лояльность может ослабевать и влиять на продажи, что приводит к падению доли рынка, а затем конкурентного преимущества. В свое время «Боинг» был обогнал Airbus в авиационной отрасли. Sears & # 39; лидерство было убрано Wal-mart.
Несмотря на наличие выбора пяти общих стратегий, предполагается, что бремя их успеха зависит от управления и того, как технология и собранная информация смешиваются для использования. Это происходит потому, что тщательный мониторинг и оценка постоянно, а также правильная идентификация и правильное время для определенного сегмента являются ключом к успеху этих стратегий из-за динамизма на рынке.
СПРАВКА
Может ли Сирс изобретать его? Пример из Лондонского университета Южного Банка.
Дэвенпорт, TH; Prusak, L. (1998) Рабочие знания: как организации управляют тем, что знают. Havard Business School Press, Бостон, Ма.
Fortune, 13 декабря 2004 года, стр. 59
http://informationr.net/ir/8-1/paper144.html
Laudon, KC; Laudon, JP (2004) Информационные системы управления: управление цифровой фирмой, 8-е издание, США: Pearson Prentice Hall.
Scholes, K.and Johnson, G (1999) Изучение корпоративной стратегии, 5-е издание. Лондон: FT Prentice Hall.
Шейла, C.Main Статья: Управление знаниями, выпуск 18,2004
Йогеш, МБ Компания, - что действительно является управлением знаниями? Пересечение пропасти надежды. Gartner Group Inc., октябрь 1996 г.
