Strategies for competitive advantage. Ways to create external and internal competitive advantage
External competitive advantage (based on quality)
At the heart of this type of competitive advantage are the distinctive qualities of the product, which are of increased value to the buyer - either by reducing the costs associated with the product, or by increasing its effectiveness. Thus, the company has the opportunity to set a higher price for the product than competitors.
External competitive advantage provides the firm with increased market power. It can force the market to agree to pay a higher price than a priority competitor that does not have the same distinctive quality. A strategy based on external competitive advantage is a differentiation strategy. In this case, the company must demonstrate its possession of marketing know-how, the ability to identify customer expectations that are not satisfied with any of the existing products, and meet these expectations.
An external competitive advantage strategy can be successful if the price premium that the consumer is willing to pay outweighs the cost of providing additional value.
Internal competitive advantage (cost-based)
Cost-based competitive advantage results from a firm's superiority in price and cost control, and product administration and management. This is especially valuable for the manufacturer, since the cost of goods becomes lower than that of the company's priority competitor.
Internal competitive advantage results from increased performance which makes the firm more profitable and also more resistant to price cuts imposed by the market or competitors. A strategy based on internal competitive advantage is a cost dominance strategy, which is determined primarily by the organizational and technological know-how of the firm. Such a strategy is successful if consumers are offered an acceptable cost and prices are close to the average market. If, in the pursuit of cheaper goods, the firm sacrifices excessive quality, then the price reduction demanded by consumers will not be able to compensate for the low cost.
Assessment of business competitiveness (search for sustainable competitive advantage)
The two types of competitive advantage discussed above are of different nature and different origin, often incompatible due to the fact that they require too different conditions and manufacturing traditions. On fig. 1 shows two types of competitive advantage, in relation to which the following questions are relevant:
* Market power: To what extent are buyers willing to pay a higher price than our direct competitor?
* Productivity: What is our cost per unit compared to a direct competitor, higher or lower?
On fig. 1, the maximum acceptable price is plotted along the horizontal axis, and the unit cost of production is plotted along the vertical axis. Both are expressed as a percentage of the corresponding indicators of the priority competitor:
* Performance axis shows advantage or lag trademark compared to a priority competitor in terms of costs. If the brand is located at the top of the axis, then it loses in terms of costs, if it is at the bottom, it has an advantage.
* The market power axis characterizes a brand's position in terms of the highest acceptable price for its buyers compared to that of a priority competitor. The more to the right the brand is located, the stronger it is and the higher the price the company can charge. Conversely, the further to the left a brand is on the axis, the less market power it has and the lower the price must be for consumers to accept the brand.
Figure 1. Competitive advantage analysis
The bisector in fig. 1 separates favorable and unfavorable positions. There are four competitive positions in total:
* A position in the upper left quadrant is a disaster, as the trademark has two disadvantages at once. It lags behind the priority competitor in terms of costs and does not have the market power to cover this gap with a price premium. Sooner or later, such a company will have to liquidate the brand or leave the market.
* The lower right quadrant, on the other hand, is an ideal situation where a brand has a low cost, supported by high performance, and a high acceptable price, due to a strong market position. This situation is rarely observed in practice, as these two positions involve completely different corporate cultures.
* The lower left quadrant includes brands that have a cost advantage but less market power than their direct competitors. In such a situation, the firm targets price-sensitive consumer segments and allocates moderate funds to operational marketing (or outsources operational marketing to a third party, such as a large retail chain).
* The upper right quadrant reflects a situation very often observed in industrialized countries: the firm has increased costs, but at the same time its market power is large enough to “cover” this disadvantage with a high acceptable price. In this case, the firm seeks to offer more added value and/or higher quality so that its price premium looks reasonable in the eyes of the buyer.
Business competitiveness assessment is carried out in order to enable the firm to find its own position along these two axes and to formulate strategic priorities for each product. To determine the position on the "market power" axis, information obtained from the research of the brand image is used, which allows to assess the perceived value of the brand and the price elasticity of demand. As for the “performance” axis, here you can use the law of accumulation of experience (if applicable) or information from the “market intelligence” service, whose task, among other things, is to monitor competition.
The competitive advantages of a product are its consumer or technical and economic parameters that affect its position in the market.
There are several types of competitive advantages of the product:
1. Price characteristics of the goods. Very often, the buyer purchases a product only because it is cheaper than other products with similar consumer properties. Sometimes a product is bought just because it is very cheap. Such purchases can occur even if the product has no utility for the buyer.
2. Product differentiation - the product has distinctive features that make it attractive to the buyer. Differentiation is entirely related to the consumer (utilitarian) qualities of the product (reliability, ease of use, good functional characteristics etc.), and can also be achieved through the recognition of a well-known brand.
3. Monopolization - the competitive advantage of the product, which consists in its position in the market. This is achieved by securing the buyer, by monopolizing part of the market.
An organization's competitive advantage is the long-term benefit of pursuing some unique customer value-creating strategy based on a unique combination of in-house resources that cannot be copied by competitors.
There are two types of competitive advantages of the organization: a) low costs and b) specialization.
Under the lower costs refers to less than competitors, the amount of production costs, as well as the ability of the company to develop, produce and sell goods more efficiently than competitors. Specialization is a focus on the release of only a certain range of goods, investing in their improvement, the ability to meet the special needs of customers and receive a premium price for this, i.e. the price is on average higher than that of competitors.
The competitiveness of a product is a complex of its consumer and cost (price) characteristics that determine the success of a product in the market, i.e. the advantage of this particular product over other offered competing products-analogues.
The competitiveness of a product is a decisive factor in its commercial success. Competitiveness is a complex concept, it includes the conformity of the product to market conditions; conformity of the product to the specific requirements and needs of consumers (in terms of quality, technical, aesthetic, economic parameters), advantage over competitors in terms of price and quality of the product.
The competitive advantages of the product include:
1. Functionality - the purpose of the goods. The presence of not one, but several functions performed - polyfunctionality - is an advantage over other analogue products.
2. Unification - compatibility with spare parts, consumables, software other models.
3. Standardization - the availability of standard components and parts, which simplifies their replacement and repair.
4. Reliability is a complex indicator that includes 3 parameters:
a) reliability (mean time in hours to first failure)
b) durability (service life)
c) maintainability - the ability to eliminate malfunctions (however, many cheap goods are designed as non-repairable).
5. Energy performance (fuel or energy efficiency). In addition to the cost of acquisition, the buyer can evaluate the cost of consumption - this is the sum of operating costs over the entire life of the product. Therefore, ceteris paribus, the buyer will choose a more economical product.
6. Aesthetic indicators.
7. Transportability.
8. Packaging (its convenience and design).
9. Warranty service (warranty period, list of warranty works, proximity of the service point).
10. Availability of related products ( Supplies, batteries, etc.).
11. The presence of substitute products reduces the competitiveness of the product, because there may be price competition between goods of different groups, but which are substitutes.
12. The availability of complementary products increases competitiveness, as this stimulates the demand for the main commodity (for example, coffee and cream, beer and roach).
Competitive advantage is those characteristics and properties of a product or brand, as well as specific forms of business organization, that provide an enterprise with a certain superiority over its competitors.
Competitive advantage is always relative in comparison with the enterprise occupying best position in the market for a product or service.
The relative advantage of a competitor is determined by various factors. Depending on the advantages created, competitiveness factors are divided into two groups:
external;
internal.
Competitive advantage is external", if it based on distinctive product qualities,
which form value for the buyer in terms of quality level, design, special features, etc. The strategy that derives from external competitive advantage is the product differentiation strategy. It is based on know-how in the field of marketing, the excellence of the enterprise in identifying and meeting the expectations of customers who are not satisfied with existing products.
internal competitive advantage is based on superiority(leadership) of the enterprise production and management costs. The internal advantage provides greater profitability, the stability of the enterprise to reduce the price of goods and therefore is of value to the manufacturer. A strategy based on internal competitive advantage is a cost dominance strategy. It is based mainly on know-how in production and management.
Internal competitive advantage is based on the superiority of the company in terms of costs, which allows to achieve the cost of manufactured products less than that of competitors.
It should be borne in mind that a lower cost gives the company an advantage if the products meet the industry average quality standard. Otherwise, a product of inferior quality may be sold by lowering its price, which reduces the share of profits. Accordingly, in this embodiment, the cost advantage does not provide benefits.
A strategy based on internal competitive advantage is a cost dominance strategy. It is based mainly on know-how in production and management.
External competitive advantage is based on distinctive properties a product or service that has more "value for money" for the buyer than similar products of competitors. This allows you to install more high prices sales than competitors that do not provide the same distinctive quality.
A strategy based on external competitive advantage is a product differentiation strategy. It is based on know-how in the field of marketing, the superiority of the enterprise in identifying and meeting the expectations of customers who are not satisfied with existing products.
So, competitive advantages can be defined as the high competence of an enterprise in any area that creates best opportunities overcome the influence of competition, attract consumers and maintain their commitment to the company's products. Competitive advantages provide consumers with a product that represents a certain value for them and for which they are willing to pay.
8. Features of bankruptcy of strategic enterprises and organizations. Measures to prevent bankruptcy of strategic enterprises and organizations.
Under the strategic enterprises and organizations are understood:
federal state unitary enterprises and open joint-stock companies
a, whose shares are in federal ownership and which carry out the production of products (works, services) of strategic importance for ensuring the defense capability and security of the state, protecting morality, health, rights and legitimate interests of citizens obligations and (or) fulfill the obligation to make mandatory payments, if the relevant obligations and (or) obligations are not fulfilled within six months from the date when they should have been fulfilled.
To initiate bankruptcy proceedings strategic enterprises or organizations, claims that in the aggregate amount to at least five hundred thousand rubles are taken into account.
In order to prevent the bankruptcy of strategic enterprises and organizations, the Government Russian Federation in the manner prescribed federal law and other regulatory legal acts of the Russian Federation:
organizes accounting and analysis financial condition strategic enterprises and organizations and their solvency;
carries out reorganization of strategic enterprises and organizations;
repay the debt of the federal budget to strategic enterprises and organizations that are executors of work under the state defense order, formed as a result of untimely payment of the state defense order;
ensures the restructuring of the debt (principal and interest, penalties and fines) of strategic enterprises and organizations that are executors of work under the state defense order to the federal budget and state off-budget funds;
contributes to the achievement of an agreement between strategic enterprises and organizations and creditors on the restructuring of their accounts payable, including through the provision of state guarantees;
conducts pre-trial rehabilitation of strategic enterprises and organizations in the manner prescribed by this Federal Law;
implements other measures aimed at preventing the bankruptcy of strategic enterprises and organizations.
A person participating in the bankruptcy case of a strategic enterprise or organization is recognized federal agency executive power, ensuring the implementation of a unified public policy in the sector of the economy in which the relevant strategic enterprise or organization operates.
The external management plan in relation to a strategic enterprise or organization may provide for transactions that are not related to the economic activities of the debtor, related to:
sale of the enterprise;
Alienation or encumbrance real estate;
disposal of other property of the debtor, the book value of which is more than five percent of the book value of the debtor's assets, determined on the basis of financial statements for the last reporting period;
obtaining and issuing loans (credits), issuing sureties and guarantees, assignment of rights of claim, transfer of debt, as well as the establishment of trust management of the debtor's property;
alienation and acquisition of shares, shares of business partnerships and companies;
conclusion of simple partnership agreements
| The external manager is not entitled to refuse to fulfill the debtor's contracts related to the performance of work under the state defense order, the provision of federal state needs in the field of maintaining the defense capability and security of the Russian Federation. The external manager is not entitled to alienate certain types property, property and other rights that are part of the property complex of the debtor - a strategic enterprise or organization intended to carry out activities related to the performance of work on the state defense order, the provision of federal state needs in the field of maintaining the defense capability and security of the Russian Federation. |
9 Standard anti-crisis PR plan.
Before the onset crisis situation the organization should develop and implement the following areas. 1. Public Relations Policies and Procedures. Approval of powers, priorities, programs, leadership. 2. A crisis communications plan is one of the most important parts of a crisis plan. 3. Information picture of the organization. 4. Information for each program. Content and timely updating are most important. This can be saved in electronic format or printed on a special information leaflet. 5. Useful links in crisis situations. Accessible educational films, public information. 6. List of key people. Work and home phones, information about work, powers, areas of responsibility - the board, top management, responsible persons in each division. 7. Determination of those responsible for public relations, with experience in public speaking. These employees need to know the public relations channels in the organization. 8. Determining the principles of interaction with the media. They should be worked out both with the staff and with the media before the crisis. 9. Basic and detailed list of media. Creation of a media database. 10. Registration of contacts with the media (with whom they met, what they said, etc.).
10. Business cycles - fluctuations in economic activity (economic conjuncture), consisting in repeated contraction (economic recession, recession, depression) and expansion of the economy (economic recovery). The cycles are periodic, but usually irregular. Usually (within the framework of the neoclassical synthesis) they are interpreted as fluctuations around a long-term trend in the development of the economy.
The deterministic view of the causes of economic cycles comes from predictable, well-defined factors that are formed at the stage of recovery (decline factors) and recession (rise factors). The stochastic point of view proceeds from the fact that cycles are generated by factors of a random nature and represent a reaction economic system to internal and external impulses.
Types of economic cycles
There are usually four main types of economic cycles:
short-term Kitchin cycles (typical period - 2-3 years);
medium-term Juglar cycles (typical period - 6-13 years);
Rhythms of Kuznets (characteristic period - 15-20 years);
Long waves of Kondratiev (characteristic period - 50-60 years).
In cycles business activity four relatively clearly distinguishable phases are distinguished: peak, decline, bottom (or “lowest point”) and rise; but to the greatest extent these phases are characteristic of Juglar cycles.
Climb occurs after reaching the lowest point of the cycle (bottom). It is characterized by a gradual increase in employment and production. Many economists believe that low inflation rates are inherent in this stage. There is an introduction of innovations in the economy with a short payback period. Demand deferred during the previous recession is realized.
Peak, or the top of the business cycle, is the "high point" of an economic recovery. In this phase, unemployment usually reaches the lowest level or disappears altogether, production capacities operate at maximum or close to it load, that is, almost all material and labor resources available in the country are involved in production. Usually, though not always, inflation rises during peaks. The gradual saturation of markets increases competition, which reduces the rate of return and increases the average payback period. The need for long-term lending is growing with a gradual decrease in the ability to repay loans.
recession(recession) is characterized by a reduction in production volumes and a decrease in business and investment activity. As a result, unemployment increases. Officially, a downturn, or recession, is defined as a downturn in business activity that continues over three months contract
Bottom(depression) of the economic cycle is the "trough" of production and employment. It is believed that this phase of the cycle is usually not long. However, history knows exceptions to this rule. The Great Depression of the 1930s, despite periodic fluctuations in business activity, lasted 10 years (1929-1939).
Similar information.
The world does not stand still, information is constantly updated, and market participants are in search of marketing ideas, ways of doing business, new views on their product. Any business is tested for strength by competitors, therefore, when developing a development strategy, it is reasonable to take into account their influence, market share, position and behavior.
What is competitive advantage
Competitive advantage is a certain superiority of a company or product over other market participants, which is used to strengthen its position when reaching the planned profit level. Competitive advantage is achieved by providing the client with more services, more quality products, the relative cheapness of goods and other qualities.
Competitive advantage for business provides:
– prospects for long-term growth;
– work stability;
- getting a higher rate of profit from the sale of goods;
- creating barriers for new players to enter the market.
Note that competitive advantages can always be found for any type of business. To do this, you should conduct a competent analysis of your product and the product of a competitor.
What are the types of competitive advantages
What allows you to create competitive advantages for business? There are 2 options for this. First of all, the product itself can provide competitive advantages. One type of competitive advantage is the price of goods. Buyers often prefer to buy a product only because of its cheapness relative to other offers with similar properties. Due to the cheapness of the product, it can be purchased even if it does not represent a special consumer value for buyers.
The second competitive advantage is differentiation. For example, when a product has distinctive features which makes the product more attractive to the consumer. In particular, differentiation can be achieved due to characteristics that are not related to consumer properties. For example, due to the brand.
If a company creates competitive advantages for its product, it can only highlight its position in the market. This can be achieved by monopolizing part of the market. True, such a situation is contrary to market relations, since the buyer is deprived of the opportunity to choose. However, in practice, many companies not only provide themselves with such a competitive advantage of the product, but also retain it for a long time.
4 criteria for assessing competitive advantages
Utility. The competitive advantage offered should be beneficial to the company's operations and should also enhance profitability and strategy development.
Uniqueness. Competitive advantage should distinguish the product from competitors, and not repeat them.
Security. It is important to legally protect your competitive advantage and make it as difficult as possible to copy it.
Value for target audience business.
Competitive Advantage Strategies
1. Cost leadership. Thanks to this strategy, the company generates revenues above the industry average due to the low cost of its production, despite high competition. When a company receives a higher rate of return, it can reinvest these funds to support the product, inform about it, or outperform competitors due to lower prices. Low costs provide protection from competitors, as revenue is maintained in conditions that other market participants are not available. Where can you use a cost leadership strategy? This strategy is applied when economies of scale or when the prospect of achieving lower costs in the long term. This strategy is chosen by companies that cannot compete in the industry at the product level and work with a differentiation approach, providing for the product distinctive characteristics. This strategy will be effective with a high proportion of consumers who are price sensitive.
This strategy often requires the unification and simplification of the product to facilitate production processes, increasing production volumes. It may also require a high initial investment in equipment and technology to reduce costs. Careful monitoring is required for this strategy to be effective. labor processes, design and development of products, with a clear organizational structure.
Cost leadership can be achieved through certain opportunities:
- limited access of the enterprise to obtaining cheap resources;
- the company has the opportunity to reduce production costs due to the accumulated experience;
– management production facilities the company is built on the principle that promotes economies of scale;
- the company provides for scrupulous management of the level of its reserves;
– strict control over invoices and production costs refusing small operations;
– availability of technology for the cheapest production in the industry;
– standardized production of the company;
2 steps to building a competitive advantage
Alexander Maryenko, Project Manager of A Dan Dzo Group of Companies, Moscow
There are no clear instructions for creating a competitive advantage, taking into account the individuality of each market. However, in such a situation, you can be guided by a certain logical algorithm:
Determine the target audience that will buy your product or influence this decision.
Determine the real need of such people related to your services or products, which are not yet satisfied by suppliers.
2. Differentiation. The company, when working with this strategy, provides unique properties for your product, which are important to the target audience. Therefore, they allow you to install on the product great cost compared to competitors.
Product leadership strategy requires:
– the product must have unique properties;
- the ability to create a reputation for high quality product;
– high qualification of employees;
- ability to protect competitive advantage.
The advantage lies in the ability to sell the product at higher prices than the industry average, avoiding direct competition. Thanks to this strategy, it is possible to achieve better commitment and loyalty to the brand, under the conditions of competent assortment building, the presence of competitive advantages.
Risks or disadvantages of using a differentiated marketing strategy:
- a significant difference in prices is possible, due to which even the unique qualities of the product will not attract a sufficient number of buyers;
- the product may lose its uniqueness when copying the advantages of cheaper products.
This strategy is used for saturated markets by companies that are ready for high investment in promotion. There is no need to talk about low cost - it will be higher than the market average. However, this is offset by the ability to sell the product at higher prices.
3. Niche leadership or focus. The strategy involves protection from major competitors and substitute products. In this case, it is possible to achieve a high rate of return due to more effective satisfaction of the needs of a narrow audience of consumers. This strategy can be built on competitive advantages of any type - on the breadth of the proposed range or the lower price of the product.
In this case, the company is limited in market share, but it does not need significant investments for product development, which is a chance for the survival of small enterprises.
Risks and disadvantages of using a focus strategy:
- there is a high probability of large differences in prices for goods compared to the leading brands of the market, which may scare away their target audience;
- the attention of large market participants is switched to niche segments in which the company operates;
- a serious danger of reducing the difference between the needs of the industry and the niche market.
Where to Use a Niche Leadership Strategy? Working with this strategy is recommended for small companies. It is most effective when the market is saturated, there are strong players, with high costs or non-competitiveness in terms of costs in comparison with market leaders.
Three stages of service strategy
I stage. Innovation. When one of the market participants introduces something new in terms of customer service. The company in this period stands out, given the presence of a new competitive advantage.
II stage. Addictive. The proposed service is becoming familiar to consumers, and an analogue is gradually being introduced in the activities of competitors.
III stage. Requirement. For consumers this proposal becomes an integral element of a service or product, moving into the category of standards.
How to check the level of service in your company
- Conducting informal surveys. The CEO and other leaders need to understand the opinion of consumers about the proposed service.
- Conducting formal surveys (focus groups). It will be rational to involve both consumers and representatives of all departments of your company for these events.
- Engage third-party consultants to interview company employees. Thanks to external consultants, the importance of answers increases (with more candid answers).
How to improve the service
Tatiana Grigorenko, managing partner of 4B Solutions, Moscow
Consider general tips to improve the service in the work of companies.
1. Surprise, influence emotions. Usually visitors in the office are offered tea bags or instant coffee. We decided to pleasantly surprise our customers - the visitor is offered a choice of 6 types of professionally prepared coffee, 6 excellent teas with branded chocolate for dessert.
2. Break the rules. On modern market it is ineffective to be like everyone else, you need to be better than the rest.
3. Listen to your customers. Do you need to ask your customers what they would be interested in?
How to create competitive advantage
When developing a competitive advantage, there are nine criteria for a successful option to consider:
1) Uniqueness.
2) Long-term. Competitive advantage should be of interest for at least three years.
3) Uniqueness.
4) Credibility.
5) Attractiveness.
6) Have Reasons to Believe (a basis for trust). Concrete grounds that will make buyers believe.
7) Be better. Buyers need to understand why this product is better than others.
8) Have the opposite. There must be a complete opposite in the market. Otherwise, it will not be a competitive advantage.
9) Brevity. Must fit in a sentence of 30 seconds.
Step #1. Compiling a list of all benefits
The benefits of the product are sought as follows:
– ask customers what competitive advantages they hope to get through your product;
– compose detailed list all the properties that the product has, based on the characteristics from the marketing mix model:
1) Product
What can be said about the product:
– functionality;
– brand symbolism: logo, name, corporate identity;
– appearance: packaging, design;
- the required quality of the product: from the position of the target market;
– service and support;
- assortment, variety.
2) Price
What can be said about the price:
– price strategy for entering the market;
– retail price: the selling price of the product must necessarily be related to the desired retail price, only if the company does not become the last link in the overall distribution chain.
- pricing for different sales channels; supposed different prices, depending on the specific link in the supply chain, a specific supplier;
- package pricing: with the simultaneous sale of several products of the company at special prices;
– policy regarding the conduct of promotional events;
– Availability of seasonal promotions or discounts;
- Possibility of price discrimination.
3) Place of sale
It is necessary to have a product on the market in the right place so that the buyer can see it and purchase it at the right time.
What can be said about the sale meta:
- sales markets, or in which the sale of goods is planned;
– distribution channels for the sale of goods;
– type and conditions of distribution;
– conditions and rules for the display of goods;
- Logistics and inventory management issues.
4) Promotion
Promotion in this case involves all marketing communications to attract the attention of the target audience to the product, with the formation of knowledge about the product and key properties, the formation of the need to purchase the product and repeat purchases.
What can be said about the promotion:
– promotion strategy: pull or push. With the Push strategy, it is supposed to push the goods through the trading chain by stimulating intermediaries and sales personnel. Pull - "pulling" products through the distribution chain by stimulating consumers, the final demand of their product;
– target values of knowledge, brand loyalty and consumption by their target audience;
– required marketing budget, SOV in the segment;
- the geography of their communication;
– communication channels for contact with consumers;
– participation in specialized shows and events;
- brand media strategy
– PR-strategy;
– promotions for the next year, events aimed at sales promotion.
5) People
– employees who represent your product and company;
– sales personnel in contact with the target consumers of the product;
– consumers who are “opinion leaders” in their category;
- manufacturers, on which the quality and price of the goods may depend;
– belong to this group and privileged consumer groups, including VIP clients and loyal customers who generate sales for the company.
What can you say about working with people:
- programs for the formation of motivation, with the development of relevant competencies and skills among employees;
– methods of working with people on whom the opinion of the consumer audience depends;
– education and loyalty programs for their sales staff;
- Methods for collecting feedback.
6) Process
This one applies to the service market and the B2B market. Under the "process" refers to the interaction of the company and consumers. It is this interaction that is the basis of buying on the market with the formation of consumer loyalty.
You can talk about programs to improve the process of providing services to your target customers. The goal is to provide maximum comfortable conditions for buyers when purchasing and using the offered service.
7) Physical environment
This also applies to the service market and B2B. This term describes what surrounds the buyer during the purchase of the service.
Step #2. Rank all the benefits
To evaluate the list, a three-point scale of the importance of characteristics is best suited:
1 point - the benefit of this characteristic for target consumers is of no value;
2 points - the benefit is not primary, which stimulates the purchase of goods in the first place;
3 points - the benefit received is one of the most significant properties offered service.
Step #3. Compare list of benefits with competitors
The resulting list of characteristics should be compared with its competitors according to two principles: the presence of this property in a competitor, whether the condition is better for a competitor or for you.
Step number 4. Look for absolute competitive advantages
Among the sources of absolute competitive advantages, it should be noted:
- the product is unique in one or several properties;
– uniqueness by combination of properties;
- special components of the product composition, a unique combination of ingredients;
– certain actions are performed better, more efficiently and quickly;
– features appearance, form, packaging, method of sale or delivery;
– creation and implementation of innovations;
- unique technologies, methods for creating a product, patents;
- qualification of personnel and the uniqueness of its human capital;
- the ability to ensure the minimum cost in their industry, while assuming a higher profit;
– special conditions of sales, after-sales service for consumers;
- access to limited raw materials, resources.
Step number 5. Look for "false" competitive advantages
First mover. Declare the properties of competitors' products first, while they have not yet informed their target audience about them;
Efficiency indicator. Creating your own performance evaluation indicator;
Curiosity and interest. You can stand out thanks to a factor that is not considered decisive when buying, but will allow you to attract the attention of the target audience.
Step number 6. Make a development and control plan
After identifying a competitive advantage, you need to form two further marketing action plans - a plan to develop your competitive advantage over the next few years and a plan to maintain the relevance of the presented advantage.
How to analyze current competitive advantages
Stage 1. Make a list of evaluation parameters
Create a list of key competitive advantages of your product and competitors.
For evaluation, a three-point scale is best suited, according to which are put:
1 point = the parameter is not fully reflected in the competitive advantages of the product;
2 points = the parameter is not fully reflected in the competitive advantage;
3 points = the parameter is fully reflected.
Stage 3. Make a development plan
Form your plan of action aimed at improving the competitive advantage of the company. It is necessary to plan improvements on the points of assessment, which were given less than three points.
How to develop competitive advantages
Competitive behavior in the market can be of three types:
Creative. Implementation of measures to create new components of market relations in order to obtain a competitive advantage in the market;
Adaptive. Accounting for innovative changes in production, ahead of competitors in terms of modernization of production;
Providing-guaranteeing. The basis is the desire to maintain and stabilize the obtained competitive advantages and market positions in the long term by supplementing the assortment, improving quality, additional services consumers.
The duration of retention of competitive advantages depends on:
source of competitive advantage. Can be a competitive advantage of high and low order. The low order advantage is represented by the possibility of using cheap raw materials, work force, components, materials, fuel and energy resources. At the same time, competitors can easily achieve low-order advantages by copying, searching for their sources of these advantages. The advantage in the form of cheap labor can also lead to negative consequences for the enterprise. With low salaries for repairmen, drivers, they can be poached by competitors. Benefits high order become an excellent reputation of the company, specially trained personnel, production and technical base.
The number of clear sources of competitive advantage in the enterprise. Large quantity the competitive advantages of the enterprise will more seriously complicate the tasks of its pursuers-competitors;
Constant modernization of production.
How to survive the crisis and maintain competitive advantages
Alexander Idrisov, Managing Partner, StrategyPartners, Moscow
1. Keep your finger on the pulse of events. Some of the employees should collect and analyze information about the state and trends of the market, how these trends can affect the business, taking into account the study of consumer preferences, demand dynamics, data on investors and competitors.
2. Develop the most pessimistic forecast for your company.
3. Focus on paying customers.
4. Focus on a narrow range of tasks. You need to carefully study the business model of your company. This does not mean that you need to abolish all areas of your activity. But it is worth focusing on a narrow range of tasks, abandoning non-core tasks or areas that can be outsourced.
5. Consider teaming up with competitors. Many companies are now ready for alliances with competitors on mutually beneficial terms.
6. Maintain relationships with potential investors. Especially important condition during the crisis - you should not lose touch with investors, it is better to activate them if possible.
Information about the author and company
Alexander Maryenko, Project Manager of A Dan Dzo Group of Companies, Moscow. Graduated from the Faculty of Finance of the Nizhny Novgorod State University. Participated in projects (more than 10, of which six - as a manager) aimed at increasing the profitability of companies' businesses and solving their systemic problems.
John Shoal, President of ServiceQualityInstitute, Minneapolis (Minnesota, USA). It is considered the founder of the service strategy. At the age of 25, he founded a firm specializing in educating companies about a culture of service. Author of five bestsellers on the topic of service, translated into 11 languages and sold in more than 40 countries.
ServiceQualityInstitute formed by John Shoal in 1972. Specializes in the development and implementation of service strategies in companies. More than 2 million people have been trained by ServiceQualityInstitute specialists. The main office is located in Minneapolis, branches - around the world (in 47 countries), their share is 70% of total number company representative offices. In Russia, ServiceQualityInstitute and John Shoal are represented by ServiceFirst.
Tatiana Grigorenko, managing partner of 4B Solutions, Moscow.
4B Solutions Company founded in 2004. Provides outsourcing and consulting services. Areas of specialization - improvement of customer service systems, anti-crisis management, professional legal and accounting business support. The staff of the company is over 20 people. Among the clients are the Association of Business Aviation, Triol Corporation, Rafamet Machine Tool Plant (Poland), ANCS Group, IFR Monitoring, MediaArtsGroup, Gaastra chain of boutiques.
Alexander Idrisov, Managing Partner of StrategyPartners, Moscow.
strategy partners. Field of activity: strategic consulting. Form of organization: LLC. Location: Moscow. Number of staff: about 100 people. Main clients (completed projects): Atlant-M, Atlant Telecom, Vostok, GAZ, MTS, Press House, Razgulay, Rosenergoatom, Russian Machines, Talosto, "Tractor Plants", "Uralsvyazinform", "Tsaritsyno", publishing houses "Enlightenment", "Eksmo", Ministry of Information Technologies and Communications of the Russian Federation, Ministry regional development Russian Federation, Murmansk port, Rosprirodnadzor, administrations of the Arkhangelsk, Nizhny Novgorod, Tomsk region And Krasnoyarsk Territory by Avantix.
