The smart pricing, differentiation, branding, marketing, asset, and targeting strategies make some brands, products, and services to be perceived as superior to others. These strategies lead to a state of competitive advantage which makes the business cater to more-than-average customers and earn more-than-average profits. Show Suppose there are 3 fruit sellers selling the exact same quality of apples near your house, but one of them attracts over 50% of the customers while the other two just sit and see the customers buying from him. What could be the secret to his success? Price? Now suppose these 3 fruit sellers started selling apples at the exact same rate, yet the previous market leader is leading this time too. What could be the secret to his success this time? Better quality of apples? Or probably the established brand? Contents show 1 What Is Competitive Advantage? 2 Types Of Competitive Advantages 3 Competitive Advantage Examples 3.1 Google 3.2 Facebook 3.3 LinkedIn What Is Competitive Advantage?Competitive advantage is a favourable position a business holds in the market which results in more customers and profits. It is what makes the brand, product, or service to be perceived as superior to the other competitors. A brand can create a competitive advantage if it is clear about these three determinants:
Types Of Competitive AdvantagesEven though the definition of competitive advantage remains the same, different marketers have stated different types of competitive advantages. Michael Porter, a Harvard University graduate, wrote a book in 1985 named – Competitive Advantage: Creating and Sustaining Superior Performance, which identified three strategies which businesses can use to tackle competition and create a sustainable competitive advantage. According to him, these three generic strategies are:
However, modern competitive advantages aren’t limited to these three. A strong brand, big pockets, network effect, patents, and trademarks are few other competitive advantage strategies businesses use to outdo their competitors.
Competitive Advantage ExamplesGoogle enjoys the competitive advantage of being the only effective search engine over the internet. The company was able to reach this height because of its size, innovation, market position, and the network effect. With its biggest competitor, Google plus, not even being close to it, Facebook surely enjoys a competitive advantage over its competitors. One of the biggest reason is the network effect, but other reasons which led to this success are constant innovation, the advertisement (free) business model, and the personalized content. LinkedIn is not a conventional social media network. It is focused on the business professionals and enjoys a competitive advantage for being a niche social media network. Go On, Tell Us What You Think!Did we miss something? Come on! Tell us what you think about our article on competitive advantage in the comments section. Aashish Pahwa A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing. What gives a company a competitive advantage?Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution network, intellectual property, and customer service.
What are the 5 competitive advantages?Sources of Competitive Advantage. Product Attribute Differentiation. One way to gain an advantage over competitors is by differentiating your product from theirs. ... . Customers' Willingness to Pay. ... . Price Discrimination. ... . Bundled Pricing. ... . Human Capital.. What are the 3 competitive advantages?There are three main types of sustainable competitive advantage: differentiation, cost leadership, and focus advantage.
What are the 4 competitive advantages?The four primary methods of gaining a competitive advantage are cost leadership, differentiation, defensive strategies and strategic alliances.
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