Quick Answer: What Are The Factors Of Competitive Advantage?

What are competitive factors?

A competitive factor is a feature or benefit considered key or essential to the promotion of a product or service to its intended market.

Because it is perceived as valuable by the customer it is a value element used to attract buyers.

Competitive factors usually include price..

What are the advantages of competitive pricing?

By making the prices the same as your competitors or even cheaper, consumers will be less inclined to move from your brand or choose your competitors products/services over yours, thus enabling you to maintain your market share.

What are the six factors of competitive advantage?

The six factors of competitive advantage are quality, price, location, selection, service and speed/turnaround.

What are the 5 areas of competitive advantage?

5 areas to drive competitive advantageMARKETING. How can your marketing team make claims about your product and the ability to deliver it without knowing the capabilities of your supply chain? … FINANCE. Here are two departments which ought to be so close their husbands and wives start to get jealous. … HUMAN RESOURCES. … LEGAL. … CUSTOMER SERVICE.

What are the two key pillars of competitive advantage?

Michael Porter defined the two ways in which an organization can achieve competitive advantage over its rivals: cost advantage and differentiation advantage. Cost advantage is when a business provides the same products and services as its competitors, albeit at a lesser cost.

What are the building blocks of competitive advantage?

The four building blocks of competitive advantage are superior efficiency, quality, innovation, and customer responsiveness (Hill & Jones, 2009; Hill et al., 2016). These building blocks allow a company to differentiate its product offerings to provide more utility to customers and/or lower its cost structure.

What is competitive disadvantage?

A competitive disadvantage is an unfavorable circumstance or condition that causes a firm to underperform in an industry. Disadvantages typically include things such as know-how, scale, scope, location, distribution, quality, product features, process efficiency, productivity and costs.

How do you achieve cost advantage?

There are two major ways to achieve a cost advantage: Control cost drivers….A number of possible changes in procurement can reduce costs:tune specifications of purchased inputs to meet needs more precisely.enhance bargaining leverage through purchasing policies.select appropriate suppliers and manage their cots.

What are the three types of competitive advantage?

There are three different types of competitive advantages that companies can actually use. They are cost, product/service differentiation, and niche strategies.

What are examples of competitive advantage?

Examples of Competitive AdvantageAccess to natural resources that are restricted from competitors.Highly skilled labor.A unique geographic location.Access to new or proprietary technology. … Ability to manufacture products at the lowest cost.Brand image recognition.

What is Porter’s model of competitive advantage?

The two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation, and focus. …

What are the components of competitive strategy?

COMPONENTS OF THE GENERIC COMPETITIVE STRATEGYCost Leadership. A business that wants to achieve an edge through cost leadership will become an expert in lowering costs while maintaining prices. … Differentiation. … Focus.

How do you identify a competitive advantage?

Identify your company’s competitive advantageCost Leadership. Typically, businesses attempt to gain cost leadership as their first competitive advantage. … Differentiation. The next strategy that companies often use for setting themselves apart from the competition is differentiation. … Strategic Alliances. … Quality. … Brand. … Service.

How can an organization achieve competitive advantage?

Firms can gain a competitive advantage through differentiation of their product offerings which provides superior customer value, or by managing for lowest delivery cost. … In most cases, an industry’s ‘return on investment’ leader opts for one of the strategies, while the second placed firm pursues the other.

How do you write a competitive advantage?

Your statement of competitive advantage has four components: your name, your company, a statement about a problem in your market, and how you and your product solve that problem. Essentially, it is a 30-second statement explaining what differentiates your company in the marketplace.