The competitive advantages for many years and there are different types, and used in various industries. John D. Rockefeller has a unique advantages by acquiring a large number of oil fields and refineries at low prices from competitors went bankrupt and the lower costs (competitive advantages), petroleum products. Andrew Carnegie is achieved through innovation and research of new materials and the most efficient producers of iron and steel, and in the process one of the largest steel company in the world. The previous series of articles on the latest research on the subject as a background for understanding the nature of competitive advantages and this article, the second of the series is over six advantages, such as fire defined by Michael Porter. They are cheap, differentiation, speed, agility, customer service and innovation.
Cost competitive advantages, The first competitive cost advantages that a company is able to identify products or services for less than competitors and offer is able to do this because the company has resulted in lower costs of doing business. One of the best-known companies to cut costs as a unique advantages Walmart. Walmart shoppers know that Wal-Mart supermarket always low prices. Maybe not the highest quality of goods or the best choice, but a particular product will be made at the lowest price available. There is one company that this method or strategy may be used. The airlines have not followed this observation, after competing on prices in the past 15 years, and in and out of bankruptcy. All companies in an industry competing on price is not sustainable. In retail, Walmart is the cost leader has lost (with some competition from regional companies, including Dollar General Stores or dollar), but the market for its cars. Department stores like Nordstrom and Saks are trying to compete on price but on the luxury segment of the retail focus. What is the impact of a company to take advantages of cost competitive? In the first place, is derived from the supply chain and internal operations (logistics or in and out of the nomenclature of Porter). Most supply chains are inefficient and should be revised to eliminate inefficiencies, while creating benefits closely with suppliers through the timely exchange of information, connecting. Research has shown that connects an efficient supply chain can create a unique sign for companies to communicate with the customer and the supplier. One way to achieve lower costs in the supply chain is removed through the exchange of information on turnover of suppliers and creating a more efficient and effective distribution of products in their stores. For example Walmart store sales data with P & G often for many years, can fill the shelves, so that P & G, if necessary. This includes monitoring the performance of the supply chain and make improvements to reduce costs further. The logistics of storage products and selling products on the market with precision and must be performed a minimum of waste to be. Walmart realized years ago that the truck has allowed the company to supply the stores faster, cheaper, and has allowed the company to the amount of material required to reduce the company. In 2005, Wal-Mart one step further by adding a goal of doubling the fuel efficiency of its fleet of trucks to 13 mpg in 2015 and 2010 had improved the mpg fleet by 60%. With less fuel translates directly into the bottom line.
Differentiation competitive advantages, A second advantages is the differentiation and is detected by the companies, the products that customers value more than competing products and companies are able to pay a premium for these products are obtained. BMW is characterized by innovative products and a theme in accordance with the product and marketing (eg machine Ultimate Guide). Their difference was the Mercedes and BMW sales in U.S. dollars of income, and that was a difficult task since Mercedes had taken a major benefit to both pass. Other companies like David Jones have a differentiation strategy in its stores in Australia, but when he tried this competitive advantages in business history to reach the supermarkets. Customers must recognize and appreciate the difference before you buy and David Jones customers to a difference in the food business done to confront their rivals to see. The failure of differentiation for David Jones because he was not in the food, because working for Whole Foods, but David Jones to implement this strategy.
There are three ways for a company to distinguish
1) better performance than the competition for that price,
2) innovations, the new market were not available for
3) low-end products to a new, careful buyers.
Companies like Juniper, use the first attribute of a higher power to their switches and Cisco routers for the same price. BMW uses the second function, as indicated above, and P & G focuses on the third way by creating cheap products for new markets around the world.
What are the inputs to the companies that would provide differentiation for competitive advantages? There are two main entrances:
1) A company must, to obtain a higher quality of components from suppliers such as competitors of the company
2) The investment in R & D.
BMW uses both areas to his advantages, because the cars are known for their high quality components and BMW have spent many dollars for his research and development. Both BMW are previews of the auto industry, as the first hydrogen vehicle. The focus on R & D leads to knowledge (known as tacit knowledge) within the company, the use of new technologies and new materials, and sets a company apart from its competitors and can be a competitive differentiator. A company must understand its competitive edge, when to use it, and BMW will show you how to understand and Walmart, so important, no Snapper. Snapper lawn mowers are primarily intended for consumers who care about your lawn, weeding, fertilizing and mowing to own. Consumers perform regular maintenance and necessary repairs and keep the mower for many years. Decided to sell Snapper mowers through Wal-Mart and Snapper, already sacrificed millions in revenue, the company is so because the performance of the cost advantages of Wal-Mart was not in accordance with the competitive advantages of differentiation snapper. Snapper could not distinguish its product line to Wal-Mart shopper, a $ 99 mower sit beside a Snapper lawn mower for $ 350 and has seen both with similar characteristics. Selling through Wal-Mart cheapens the brand and its continued long-term competitive differentiation Snapper always. Snapper made the right decision.
Accelerating competitive advantages, The competitive advantages of speed is to supply a product in a timely manner, where speed is of the essence and the customer pays a premium to the product quickly. For companies like United Parcel Service and Federal Express, the speed is everything. Reduce time-to-market or time-to-customer, is a form of competitive advantages and the speed is a goal that is common for many companies. Researchers have discovered quickly that in a market faster and at a competitive advantages for our customers can be. General Motors has reduced the development time of new car market for four years to 28 months, cutting development costs dramatically. A good example was named the Chevrolet HHR, a small SUV car /, which was based on a platform car that GM was able to design and build in three years. Strategies of direct sales and build-to-order production must to minimize stock and quickly create new products successfully to market, let Dell increasing its market share and achieve high ROI obtained. In fact, Dell is able to collect money from customers at the time of purchase, but does not pay suppliers for 30 days, Dell’s suppliers to finance their inventory. Apple has been successful because it is more a unique advantages. Apple has in the development of innovative products since Steve Jobs returned to the company as CEO in the nineties, but also has an advantages through their supply chain. The company has pushed the innovation to their suppliers, in a corner of the market and the supply of lasers and other required components. Gartner has Apple as the best supply chain for four consecutive years (Business Week, November 3, 2011) and Apple has seen a doubling of investment in the supply chain in the coming year.
This means that the market quickly, yawning is not the speed of competitive advantages, the customer, as the Chevrolet HHR was published in 2006, translating, necessary because the vehicle had a similar design as the Chrysler PT Cruiser, which has been available since 2000 . The cost of reducing the costs of design and production of a vehicle and get products to market faster is a worthy goal, but should develop and General Motors vehicles at the request of the customer to build and acquire. After the failure that occurred and the government rescue, GM still has a long way to go to achieve a competitive advantages for each type. Dell has a speed advantages, and though still a very efficient production and supply chain, this is no longer sufficient to gain a competitive advantages. Dell has again Michael Dell, founder of the company as CEO in an attempt to transform the company has charged. This worked for Apple and Starbucks, who both spent their founder, but so far nothing has worked for Dell’s stock is about 40% since Michael Dell took back the helm.
Agility competitive advantages, Another advantages is the flexibility and the ability to be flexible as the needs of the changing market and agility will allow the company to take advantages of the opportunity is defined. Toyota is a company that has the advantages of maneuverability. While Toyota’s competitive advantages can be characterized as cost, speed or differentiation, the competitive advantages that the best solution, is agility. Of course, with parts of the competitive advantages is the number of power a Toyota car salesman (surpass General Motors) has helped, but it is the Toyota Production System, which companies can be agile, can Toyota largely flexible, and its suppliers are flexible. Although Toyota uses many of the same suppliers as the U.S. big three automakers, suppliers are more efficient with Toyota because Toyota is working with its suppliers on how best to work with Toyota to work and how can the supplier of good ideas their products and their production system. Agility Toyota offers the flexibility to enter new markets faster than the competition (like the Prius).
Customer Service Competitive Advantages, The fifth type of competitive advantages is customer service, which is defined as a greater sensitivity to the needs of customers. The competitive advantages of a rapid response to customer order, but also the knowledge of a customer so well that the new company on a regular basis, which is desirable for the creation of his customers has been derived. Competitive advantages of the customers, the company can report the value to the customers in a way that makes it difficult for competitors to compete. Companies such as Nordstrom and granite rocks are examples of companies that have a competitive advantages through customer service. This is mainly due to their team of sales and marketing, which is an environment, the problem for free and every customer interaction is good or society has the right to create. Companies like Granite Rock and Orica from natural raw materials, but maintaining a competitive advantages through the creation of reports, the error-free and great value for the customer so much, does not want the customer to work with a competitor. Nordstrom customers are very loyal since Nordstrom salespeople know their customers well and get in touch as the products that might be interesting to have arrived in stores. Sales staff are known for distributing the goods to the customer in case of emergency.
Innovation competitive advantages, The final advantages is the company innovation.A that competitive advantages is innovation, which is a continuous flow of creative products and services that are valued by customers. Competitive advantages a company of innovation is structured in a systematic way that ideas and innovations into new products. 3M is a good example of the company, innovation is a competitive advantages. 3M, known for notes, receives most of its revenues from products that did not exist five years ago. Each of the 35 business units, each with a strong business acumen in a separate market and industry, different products, the momentum and the ability to create new units. Respondents gave 3M. “If we have a new business opportunity that shows great potential, we try a cross-functional teams to build, as you progress, you can start a separate organization, in other words to be, every opportunity is a potential new division . L ‘driver is an enterprise-wide requirement that each unit of 30 percent of sales each year, products that were introduced in the past four years to produce. 3M has a corporate culture and infrastructure in place that not only promotes innovation but also demands innovation and 3M have a competitive advantages over its competitors. Apple and Google are two companies that are innovative and use of innovative competitive advantages. Google, known primarily as a research firm, has seen the exploding market for mobile telephony and implemented quickly, causing more and the number two producer of the mobile phone from Apple, beating the former No. 1 Nokia knees, without the benefit of Investigation. Google has succeeded by bringing in new markets, boosting its staff to 20% of their time on ideas outside their professional duties and the basis for new products. Apple Computer has grown from companies (also changed his name), a lifestyle technology company with products including the iPod, iPhone and iPad moves, and are leaders in each of these segments. There are many types of competitive advantages and competitive advantages is not better than others. It ‘important that the company’s need for a competitive advantages to understand and use a maximum competitive advantages. The next article will focus on information technology (IT), and in particular the standard called ITIL (Information Technology Information Library) and if it can be used for a competitive advantages to concentrate.