competitive advantage. businesses look to gain advantage over their competition in the eyes of the...

Competitive Advantage

• Businesses look to gain advantage over their competition in the eyes of the consumer

• Some may be • Sustainable• Continues over time

• Non-sustainable• Easily replicated

Competitive Advantage

Sustainable Competitive Advantage

• Hold Customers Despite Competition• Examples– Unique Selling Proposition (USP)– Lowering Production Costs– Servicing a Niche Market– Creating Customer Loyalty

Unique Selling Proposition (USP)

– something that no one else has– ex: patents• No one can replicate you idea/design

Unique Selling Proposition (USP)

Low Production Costs– reducing costs to create or deliver

products– Finding a way to run your business in a

cheaper way than the competition– ex: new technology to make product

more cheaply

Lowering Production Costs

Servicing a Niche Market– finding a specific market that others

have difficulty serving– ex: specialized software– ex: referee whistles

Servicing a Niche Market

Creating Customer Loyalty– customers can be loyal to brand,

product retailer, etc.– You go back time and time again • Because of a variety of reasons

– Trust the people, like the style, havn’t done you wrong in the past, friendly employees, etc.

– ex: a customer may buy the same brand of shoes each time

Creating Customer Loyalty

Non-Sustainable Competitive Advantages

• Shifts customers from the competition• The shift is only temporary and can be replicated• Examples:– Promotion– Placement– Quality– Benefits of use– Design features

Promotion– advertising is almost always required– top-of-the-mind awareness– ex: “Roll Up The Rim To Win”

Promotion

Placement– need to get product to customer– stores, cities, corners– The competitor that can find the easiest

way to deliver the product/service often wins

– ex: big retail stores that wipe out the competition are called category killers

Placement

Quality

– best, easiest to use, lightest, etc.– Certain businesses will push that their

product is the best quality and that’s why you should give them their business

– ex: Ferraro Rocher

Quality

Benefits of Use– marketing the product based on what it

does– “Your life will be better because of this

product or service”– ex: if you buy the ps3 vs the xbox 360 –

you can easily stream videos wirelessly from you PC to your TV

Benefits of Use

Design Features

– features that are different between products

– Example: What smartphone A does vs. smartphone B

– ex: color, shape, extra buttons, etc.

Design Features

Today & Tomorrow’s Work• Open “Competitive Advantage

Assignment”