10 - Creating Sustainable Competitive Advantage
1. Explain the difference between ‘competitive advantage’ from ‘sustainable
competitive advantage’.
Competitive Advantage-
-Temporary, fleeting
-Resources are difficult to be immitated at first
-Focus on boosting position in the industry and market share
Sustainable Competitive Advantage
-Goes on for years, decades
-Resources cannot be imitated
-Focus on cost leadership or differentiation
-Strategic in acquiring assets, e.g. investing in research
-Invests in people.
2. Discuss how companies differentiate their products for maximum competitive
advantage.
in order to differentiate their products for maximum competitive advantage,
companies should choose a differentiation strategy that use a core skill,
competence or marketing asset of the company which competitors do not possess and
will find hard to develop. For instance, companies should think outside of the box
and focus on augmented and unexpected offer to catch their competitors off-guard.
The most important question to ask is, "What is our brand's unique selling point?"
and leverage on the answer.
3. Under what condition ‘deletion strategies’ are necessary?
Deletion Strategies are necessary when a product reaches the death stage of the
product life cycle. This means that there is a dramatic decline in sales and
profits, and the products is draining the company's resources. When all possible
remedies were exhausted, perhaps the product/brand has reached the point of no
return, in short to be eliminated or be replaced by another product.
4. Discuss the two main activities to creating competitive advantage?
(1) Cost leadership-Indentifying the drivers of cost with the aim of reducing
costs/expenses. In order to become a cost leader, the company should be very
creative in identifying hidden or other cost drivers. Cost advantage is diffiuclt
to sustain and defend in the face of stiff competition. Cost leadership entails
offering products at low prices. Therefore, the challenge is how the come up with
ways to make this possible. Strategies should be focused on making internal
activities of intentional and efficient. For example, identifying where to cut
costs on the supply chain.
(2) Differentiation- Differation drivers must be identified first, paying close
attention to those that offer the most leverage using the company's skills to the
fullest. This route involves tackling different fronts in order to be effective.
Marketing efforts should employed to make market segments be aware of perceived
differentiation. For instance, a brand new brand logo, apperance, pricing, etc.
Most importantly, barriers to copying should be put up, such as patenting,
switching costs, etc. to retain customers.
5. Identify a company following a market niche strategy in each of the following
1. Explain the difference between ‘competitive advantage’ from ‘sustainable
competitive advantage’.
Competitive Advantage-
-Temporary, fleeting
-Resources are difficult to be immitated at first
-Focus on boosting position in the industry and market share
Sustainable Competitive Advantage
-Goes on for years, decades
-Resources cannot be imitated
-Focus on cost leadership or differentiation
-Strategic in acquiring assets, e.g. investing in research
-Invests in people.
2. Discuss how companies differentiate their products for maximum competitive
advantage.
in order to differentiate their products for maximum competitive advantage,
companies should choose a differentiation strategy that use a core skill,
competence or marketing asset of the company which competitors do not possess and
will find hard to develop. For instance, companies should think outside of the box
and focus on augmented and unexpected offer to catch their competitors off-guard.
The most important question to ask is, "What is our brand's unique selling point?"
and leverage on the answer.
3. Under what condition ‘deletion strategies’ are necessary?
Deletion Strategies are necessary when a product reaches the death stage of the
product life cycle. This means that there is a dramatic decline in sales and
profits, and the products is draining the company's resources. When all possible
remedies were exhausted, perhaps the product/brand has reached the point of no
return, in short to be eliminated or be replaced by another product.
4. Discuss the two main activities to creating competitive advantage?
(1) Cost leadership-Indentifying the drivers of cost with the aim of reducing
costs/expenses. In order to become a cost leader, the company should be very
creative in identifying hidden or other cost drivers. Cost advantage is diffiuclt
to sustain and defend in the face of stiff competition. Cost leadership entails
offering products at low prices. Therefore, the challenge is how the come up with
ways to make this possible. Strategies should be focused on making internal
activities of intentional and efficient. For example, identifying where to cut
costs on the supply chain.
(2) Differentiation- Differation drivers must be identified first, paying close
attention to those that offer the most leverage using the company's skills to the
fullest. This route involves tackling different fronts in order to be effective.
Marketing efforts should employed to make market segments be aware of perceived
differentiation. For instance, a brand new brand logo, apperance, pricing, etc.
Most importantly, barriers to copying should be put up, such as patenting,
switching costs, etc. to retain customers.
5. Identify a company following a market niche strategy in each of the following
