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”