Scribd
Upload
2K views

What Is Competitive Advantage?: TECHNO 1101 Technopreneurship

The document discusses competitive advantage and how to analyze competitors. It defines competitive advantage and lists types of intellectual property and strategies for achieving competitive advantage like cost leadership and differentiation. It also provides tips for conducting a competitive analysis including identifying competitors, their objectives and strategies, and analyzing factors like price, resources, efficiencies, and partnerships.

Uploaded by

Bry Ramos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
2K views

What Is Competitive Advantage?: TECHNO 1101 Technopreneurship

The document discusses competitive advantage and how to analyze competitors. It defines competitive advantage and lists types of intellectual property and strategies for achieving competitive advantage like cost leadership and differentiation. It also provides tips for conducting a competitive analysis including identifying competitors, their objectives and strategies, and analyzing factors like price, resources, efficiencies, and partnerships.

Uploaded by

Bry Ramos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

TECHNO 1101

Technopreneurship

CO5: Creating Competitive Advantage

What is Competitive Advantage?


- refers to factors that allow a company to produce goods or services better or more
cheaply than its rivals. These factors allow the productive entity to generate more
sales or superior margins compared to its market rivals.
- attributed to a variety of factors including cost structure, branding, the quality of
product offerings, the distribution network, intellectual property, and customer
service.

Types of Intellectual Property


1. Patents
o allows the inventor exclusive rights to the invention, which could be a
design, process, an improvement, or physical invention such as a machine.
Technology and software companies often have patents for their designs.
Example: the patent for the personal computer was filed in 1980 by Steve
Jobs and three other colleagues at Apple Inc.
2. Copyrights
o provides authors and creators of original material the exclusive right to use,
copy, or duplicate their material.
3. Trademarks
o a symbol, phrase, or insignia that is recognizable and represents a product
that legally separates it from other products. A trademark is exclusively
assigned to a company, meaning the company owns the trademark so that
no others may use or copy it.
4. Franchises
o a license that a company, individual, or party–called the franchisee–
purchases allowing them to use a company's–the franchisor–name,
trademark, proprietary knowledge, and processes.
5. Trade Secrets
o a company's process or practice that is not public information, which
provides an economic benefit or advantage to the company or holder of the
trade secret.

Example of Competitive Advantage


- Access to natural resources that are restricted from competitors
- Highly skilled labor
- A unique geographic location
- Access to new or proprietary technology
- Ability to manufacture products at the lowest cost
- Brand image recognition
TECHNO 1101
Technopreneurship

Constructing a Competitive Advantage


 Benefit
A company must be clear what benefit(s) their product or service provides. It must
offer real value and generate interest.
 Target Market
A company must establish who is purchasing from the company and how it can
cater to its target market.
 Competitors
Important for a company to understand other competitors in the competitive
landscape.

To construct a competitive advantage, a company must be able to detail the


benefit that they provide to their target market in ways that other competitors cannot.

Strategies for Competitive Advantage


1. Cost Leadership
In this strategy, the objective is to become the lowest-cost producer. If a company
is able to utilize economies of scale and produce products at a cost lower than that
of its competitors, the company is then able to establish a selling price that is
unable to be replicated by other companies. Therefore, a company adopting a cost
leadership strategy would be able to reap profits due to its significant cost
advantage over its competitors.
2. Differentiation
In differentiation, a company’s products or services are differentiated from that of
its competitors. This can be done by delivering high-quality products or services to
customers or innovating products or services.
If a company is able to differentiate successfully, the company would then be able
to set a premium price on its products or services.
3. Focus
In this strategy, a company focuses on a narrow target market segment. This
strategy is successful if the company is able to successfully create
products/services that can cater to these customers.

Competitive Advantage in the Marketplace


1. McDonald’s
McDonald’s main competitive advantage relies on a cost leadership strategy. The
company is able to utilize economies of scale and produce products at a low cost
and, as a result, offer products at a lower selling price than that of its competitors.
2. Louis Vuitton
Louis Vuitton’s advantage relies on both differentiation and a differentiation-focus
strategy. The company is able to be a leader in the luxury market and command
premium prices through product uniqueness.
3. Walmart
Walmart’s advantage relies on a cost leadership strategy. Walmart is able to offer
“everyday low prices” through economies of scale.

Competitive Advantage: https://www.youtube.com/watch?v=PeCCT7CKpYA


TECHNO 1101
Technopreneurship

How to Conduct a Competitive Market Analysis

Competitive Analysis
- a way to identify competitors, and understand competitor's strengths and
weaknesses in relation to yours. It helps you gauge how to curb competitors and
refine your strategy.

Who are my Competitors?


 What is the range of products and services they offer?
 Are their products or services aimed at satisfying similar target markets?
 Do they operate in the same geographic area?

Identifying Competitor Objectives and Strategies


Identifying your competitor’s objectives and strategies will provide you with viable strategy
ideas to try on your target market.

First, ask the following questions to help you identify your competitor’s objects. Are your
competitors trying to:

 Maintain or increase market share?


 Maximize short-term or long-term profits?
 Introduce technologically improved products into your market?
 Establish themselves as the market leaders?
 Develop new markets for existing products?

Once you have identified what your competitors are trying to achieve, you will need to
determine what type of strategy they have employed so you can eventually counteract
with a strategy of your own. Some possible strategies are:

 Reducing prices.
 Advertising in new publications, or advertising more frequently.
 Buying out a competitor to increase market share and customer base.
 Improving a product with a new innovation.

How to Analyze Your Competitive Information


1. Evaluate Their Product Features and Benefits
2. Determine Your Competitor’s Market Share
 Define the standards for a particular product or service.
 Influence the popular perception of the product or service.
 Devote resources to maintaining their market share.

Current Market Share = Company Sales / Industry Sales


TECHNO 1101
Technopreneurship

Other Factors to Consider:

1. Price
- It's best to look for trends in pricing rather than momentary rises and falls.
2. Financial resources
- Are they withstanding financial setbacks? How are they funding new product
development and improvement?
3. Operational efficiencies
- Are they able to save time and cost with clever production and delivery
techniques?
4. Product line breadth
- How easily can they increase revenues by selling related products?
5. Strategic partnerships
- What kinds of relationships do they have with other companies?
6. Company morale/personnel
- What is the motivation, commitment, and productivity level of the employees?

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy