Some companies simply do what they do better than anyone else. FedEx started with an innovative strategy. However, it maintained its leadership even after dozens of other companies jumped into the night transportation business doing very well. For people, this can mean creating operating systems or new ways of analyzing data.
When you do what you do very well, you gain a competitive advantage over those who do it more slowly and for longer. Competitive advantage refers to the factors that allow a company to produce goods or services better or cheaper than its rivals. These factors allow the productive entity to generate more sales or higher margins compared to its rivals in the market. Competitive advantages are attributed to a variety of factors, such as cost structure, brand, quality of product offerings, distribution network, intellectual property and customer service.
The term competitive advantage traditionally refers to the business world, but it can also be applied to a country, organization, or even a person competing for something. A valuable resource, rare, difficult to imitate and organized to capture value is a long-term competitive advantage. Competitive advantages generate greater value for a company and its shareholders due to certain strengths or conditions. It's worth keeping in mind that a single resource that offers a competitive advantage is no guarantee of value or success, and may only be a temporary situation.
Sustainable competitive advantage helps companies to outperform the competition for a long period of time. The competitive advantages that result from economies of scale usually refer to supply-side advantages, such as the purchasing power of a large restaurant or retail chain. This is usually done by evaluating the strengths and weaknesses of competitors and seeing where you can fill the gap or take a step forward and improve. The e-commerce platform has a level of scale and efficiency that is difficult for retail competitors to replicate, allowing it to gain prominence largely thanks to price competition.
For more information on how to help you or your company take advantage of the competitive advantage, contact Joel. He states that a country should focus on what it can produce and export relatively cheaper, so if a country has a competitive advantage in producing both products A & B, it should only produce product A if it can do better than B and import B from some other country. Some companies choose to focus on one or more limited market segments to protect themselves from competition. Whole Foods and its strategy of offering a wide variety of organic products instead of a shelf or aisle, like most grocery stores, are an example of this strategic option at play.
FrogDog focuses on creating measurable strategies in partnership with the leaders of the client company that help achieve business objectives effectively and efficiently. Erik Huberman's Hawke method: packed with real-world examples of successful business strategies. Large companies use cost leadership strategies to achieve the lowest possible production and distribution costs through economies of scale.
