Competitive Advantages

BMI3C

Competitive Advantage An advantage a business has over

its competitors May be

Sustainable (i.e. an advantage you can maintain over your competitors in order to hold onto customers)

Non-sustainable (i.e. an advantage that your competitors could take away from you in order to shift sales in their direction)

Sustainable Competitive Advantages

Develop a unique selling proposition (USP) develop something (a benefit) that

the competition does NOT have and likely will not develop or match

Sustainable Competitive Advantages

Lower production costs reduce costs

use cost-efficient, high-technology manufacturing systems and processes to reduce the costs associated with its products

(eg. move to another country with lower resource costs, fewer taxes, & a lower cost of living)

Sustainable Competitive Advantages

Service a niche market recognize an opportunity to create a

niche market & take advantage of it

Sustainable Competitive Advantages

Create customer loyalty this is called relationship marketing the consumer develops a strong

relationship with the product or the retailer

Activity

For each type of sustainable competitive advantage, give an example of a company that you think is a good example USP Lower production costs Niche market Customer loyalty

Non-sustainable Competitive Advantages Promotion

consumers advertise their products to place their brands in the minds of the consumer (eg. Tim Hortons – “roll up the rim to win”)

brand awareness - the major goal of the company is to aim for top-or-the-mind awareness

means that the consumer is most likely to think about one brand of product or service before they thinks of any other

Non-sustainable Competitive Advantages Placement

to compete, a product must have a placement in the market, the more placement it has, the more competitive it is

if a product has exclusive distribution in a market, it is very competitive (eg. only bottled water in a vending machine)

a marketing goal for some companies is to eliminate the competition

superstores move in and small retail stores go out of business (eg. Chapters) or large companies buy smaller companies and then discontinue their brands

Non-sustainable Competitive Advantages Quality

one way to compete against other products is to be the best of its type (eg. stronger, faster, lighter, easier to open, easier to close)

companies are constantly adding features to improve the product and taking away features that are not beneficial

the finest quality products are deemed to be top-of-the-line and are sought after by some consumers (eg. Cars: Mercedes; Lexus)

Non-sustainable Competitive Advantages

Benefits of use the value of a product is in what the

product will do for the person who buys it

marketers highlight the benefits that distinguish its’ product from the competition, hoping to appeal to the competition

Non-sustainable Competitive Advantages

Price price is only a competitive advantage

if the product is less expensive than a competitor’s AND all features of the product are equal

if the products are different, then price is not the main competitive advantage

Non-sustainable Competitive Advantages Design features

design influences the way a product looks and what it does

design features and changes in design have to catch consumers’ interest to have a competitive edge (eg. cars, fashion industry)

package design also competes for the consumer’s attention (eg. the shape of the bottle, the pattern of the label, the way it opens, the handle)

packages can also be practical and attract attention that way (eg. squeeze bottle, jar that turns into a glass, decorative cookie tin can become a storage container)

Activity

With a partner, list 10 products, and their main competitive advantage

What are the most sustainable competitive advantages?