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Competitive Advantages - Hale-Business

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					Competitive Advantages

          BMI3C
Competitive Advantage
   An advantage a business has over its
    competitors
   May be
       Sustainable (i.e. an advantage you can
        maintain over your competitors in order to
        hold onto customers)
       Non-sustainable (i.e. an advantage that
        your competitors could take away from you
        in order to shift sales in their direction)
Sustainable Competitive
Advantages
   Develop a unique selling proposition
    (USP)
       develop something (a benefit) that the
        competition does NOT have and likely will
        not develop or match
Sustainable Competitive
Advantages
   Lower production costs
       reduce costs
            use cost-efficient, high-technology
             manufacturing systems and processes to
             reduce the costs associated with its products
       (eg. move to another country with lower
        resource costs, fewer taxes, & a lower cost
        of living)
Sustainable Competitive
Advantages
   Service a niche market
       recognize an opportunity to create a niche
        market & take advantage of it
Sustainable Competitive
Advantages
   Create customer loyalty
       this is called relationship marketing
       the consumer develops a strong
        relationship with the product or the retailer
Activity
   For each type of sustainable
    competitive advantage, give an
    example of a company that you think is
    a good example
       USP
       Lower production costs
       Niche market
       Customer loyalty
Non-sustainable Competitive
Advantages
   Promotion
       consumers advertise their products to place their
        brands in the minds of the consumer (eg. Tim
        Hortons – “roll up the rim to win”)
       brand awareness - the major goal of the company
        is to aim for top-or-the-mind awareness
            means that the consumer is most likely to think about
             one brand of product or service before they thinks of any
             other
Non-sustainable Competitive
Advantages
   Placement
       to compete, a product must have a placement in the market,
        the more placement it has, the more competitive it is
       if a product has exclusive distribution in a market, it is very
        competitive (eg. only bottled water in a vending machine)
       a marketing goal for some companies is to eliminate the
        competition
       superstores move in and small retail stores go out of
        business (eg. Chapters) or large companies buy smaller
        companies and then discontinue their brands
Non-sustainable Competitive
Advantages
   Quality
       one way to compete against other products is to
        be the best of its type (eg. stronger, faster,
        lighter, easier to open, easier to close)
       companies are constantly adding features to
        improve the product and taking away features
        that are not beneficial
       the finest quality products are deemed to be top-
        of-the-line and are sought after by some
        consumers (eg. Cars: Mercedes; Lexus)
Non-sustainable Competitive
Advantages
   Benefits of use
       the value of a product is in what the
        product will do for the person who buys it
       marketers highlight the benefits that
        distinguish its’ product from the
        competition, hoping to appeal to the
        competition
Non-sustainable Competitive
Advantages
   Price
       price is only a competitive advantage if the
        product is less expensive than a
        competitor’s AND all features of the
        product are equal
       if the products are different, then price is
        not the main competitive advantage
Non-sustainable Competitive
Advantages
   Design features
       design influences the way a product looks and what it does
       design features and changes in design have to catch
        consumers’ interest to have a competitive edge (eg. cars,
        fashion industry)
       package design also competes for the consumer’s attention
        (eg. the shape of the bottle, the pattern of the label, the
        way it opens, the handle)
       packages can also be practical and attract attention that way
        (eg. squeeze bottle, jar that turns into a glass, decorative
        cookie tin can become a storage container)
Activity
   With a partner, list 10 products, and
    their main competitive advantage
   What are the most sustainable
    competitive advantages?

				
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posted:8/18/2012
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