Competitive Advantage Strategies Or Process

Competitive Advantage Strategies

Globally, business competition is high as the number of entrepreneurs has increased tremendously in the market. These results to the availability of a large pool of sellers from which the consumer can choose from when buying goods and services. Therefore, the entrepreneurs scramble and compete for the limited numbers of potential customers in the market. Firms are continually seeking for competitive advantage in the marketplace. These ensure that the firms' products have high sales in the market compared to those of the competitors in the market. Competition in the market is unavoidable, and therefore companies have to look for ways to attract a high number of customers compared to the competitors. This paper will look at the ways a firm can use to become competitive in the market (Rothaermel, 2015).

According to Kim and Mauborgne (2014), blue ocean strategy is the ideal way of firm battling competitors in the marketplace. This plan aims at creating "blue oceans" of uncontested market space which is ripe for growth. The "blue oceans" are areas of no competition for the firms' products and service. These areas make the firm be the sole supplier in the market hence have high sales. This strategy aims at getting a marketplace which has no competitors. Despite the fact that businesses cannot avoid competition in the market these can be created through intensive differentiation of the company's products and lower the costs of the products.

According to Tanwar (2013), Porter notes that firm's position in the industry determines whether its profitability is above or below the industry average. The competitive advantage of a company in the market ensures that profit is above the standard in the industry. A firm has two competitive advantages' which are low cost and differentiation.  Competitive advantages strategies of a company entails ways of a business ensuring it competes effectively in the market. These plans include; cost leadership, differentiation, and focus.

Cost Leadership

In this strategy, the firm becomes a low-cost producer in the industry. These are achieved through the firm pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. The firm is, therefore, able to offer its products at lower prices compared to those of competitors in the market thus attracting a large number of potential customers.

Differentiation

The firm in differentiation strategy seeks to make itself unique through its products and services. These would make its products have high sales in the market as they have no competition. The firm is rewarded for its uniqueness with a premium price.

Focus

Focus rests on the ability of a firm to choose a narrow competitive scope in the market. These include the company paying attention in specific segments in which its products have a high number of customers. These make the firm reduce unnecessary costs and meet its target market fully (Porter, 2008).

References

Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Porter, M. E. (2008). Competitive strategy: Techniques for analyzing industries and competitors. Simon and Schuster.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of Business and Management, 15(1), 11-17.