What are the different sources of competitive advantages?
In business, a competitive advantage of a strategy, product or process that allows one business to get in front of its competitors. Having a competitive advantage can be the key to better performance, even if it is not always easy to come. There are many different sources of competitive advantages, although most fall into two categories, known as cost reduction and differentiation. Progress of cost reduction focuses on strategies that help reduce costs and thus prices, while the benefits of differentiation help to distinguish society from competitors. Understanding various sources of a competitive advantage can help businesses develop ideas about maximizing profits on the hard and competitive market.
One of the main sources The competitive advantage is proprietary information or technology. A company that has a patented product or process is often in an excellent position to reduce costs or distinguish its products through excellent technology. In addition, competitors may be licensedThe same technology, you have to pay a company with patented processes. Patented or proprietary information can also allow the company to develop further and improved versions of products faster than their competitors, giving them a clear advantage on the market.
Some experts argue that one of the most important sources of a competitive advantage based on differentiation is customer relationships. Customer loyalty is created not only by creating good products, but also to the company's ability to help its customers. If the customer has good experience with company representatives, such as excellent auxiliary line staff or an effective and smooth exchange process, it can more likely rely on this company for future needs. The development of the company's reputation suitable for a customer can certainly help improve performance and thus overcome the competition.
Agility related to the market is also quite important to createthe competitive advantage. Companies must be able to record market trends and respond quickly to keep up with customers' needs. This type of advantage is created through a double process: first, the company must have market analysts who can understand trends and predict futures with good accuracy, and secondly, society itself must be flexible enough to quickly and smoothly integrate changes.
One of the most difficult sources of a competitive advantage is access to supplies. If the company can control most of the source, it can be able to reduce costs much more efficiently than competitors. Control can also help distinguish the product from other similar offers, especially if the company is the only source of a particular source. For example, a sports arena, which serves as a home field of a professional football team, has a competitive advantage based on supplies over other close sports, as it is the only supplier of professional football games inthe area of this area. This effectively means that he can charge everything he wants for tickets because he has no competition.