Competitive advantage
In economics, one uses the term competitive advantage the projection of an actor on the market over its competitors in the economic competition.
Definition
According to Gordon ( 1959) suspected a competitive advantage when an organization or a company can produce a product or service at a lower opportunity cost than its competitors.
This very heavy financial ' definition is clearer if one uses the definition of Robert M. Grant ( a recognized strategy expert of 1990 ):
"When two or more firms compete within the same market, one firm poss esses a competitive advantage over its rivals When it earns a persistently higher rate of profit (or Has the potential to earn a persistently higher rate of profit ) ( When two or more companies compete in the same market, then has a company a competitive advantage over their rivals when they sustainably achieved a higher profit rate ( or has the potential to achieve a higher profit rate) ) "
Grant emphasized here the main points of the business approach
- Competition
- Profit
- Sustainability ( not in terms of environmental sustainability but as repeatability of profits)
These three factors appear at all definitions of competitive advantage in a large extent. It is important not to point out that an economic profit can be defined in many ways, such as short-term or long-term capital gain vs. Cash flow, so that Grant's of itself require clear definition in practice a clarification of the factors considered.
Market Structural Analysis ( M.E. Porter)
The competitive advantage can be divided into a provider advantage that is generated within the company ( eg, lower production costs, leading to higher profit) and a customer benefit that the company generates on the market. The providers benefit can be divided into revenue advantage ( increase the purchase price by, for example, image benefits ) and cost advantage ( lower manufacturing costs). The customer benefit can be further divided into a utility advantage ( better products ) and a cost advantage (lower price).
Some of the leading strategic competitive advantage ( competitive strategy ) to develop and use are by Michael E. Porter. He ( The Competitive Advantage of Nations ) applied the concept of competitive advantage in an empirically -based analysis on regions and countries and thus the slogan International competitiveness given a scientific basis.
While Porter argues from its market- structural considerations out, researchers have recently followed the strategists of the military and have the resources placed at the center.
The resource approach
Among others, John Anderson Kay represents the resource approach to the strategy in which the available resources and capabilities (English capabilities) the essential basis for competitive advantage form (see core competence).
Kay describes three distinguishing skills (English distinctive capabilities; elsewhere core competencies ) that make up the from the accumulation of cumulative experience, knowledge and systems within an organization, and to reduce costs, speed in developing new resources or extension existing come into effect.
- Reputation ... builds on the relationship between the organization, suppliers and customers. A special reputation for reliability, for example, fast service, etc. is a source of competitive advantage where a buyer the reputation of the organization assesses higher than that of a competitor, when placing an order. But reputations are ' perishable ' sources of competitive advantage, ie do not maintain neat reputations to fall apart (Who does not advertise who dies ).
- Architecture (English architecture ) called Kay the network of internal and external relationship between staff, customers, suppliers through knowledge, information and organizational routines to be communicated.
- Innovation can be a source of competitive advantage when it turns to the organization the resources available to compete more effectively by products are offered, the new competitive opportunities can be opened (for example, new distribution channels) represent more value for the customer or. Innovation, however, is only a source of competitive advantage if they do not easily imitated or to be outbid by ' alternative innovations '.
In addition to these distinguishing skills, there are resources that provide competitive advantages according to Kay's argument. Kay identifies three such strategic resources ( engl. strategic asset ):
- Natural monopolies (English natural mono- polies ), such as to quality returns to scale or closed system compatibility as the Windows operating system from Microsoft, or near or very low-cost factors of production ( raw minerals, labor pool with specialized skills, research laboratories or cheap labor )
- Opportunity cost ( engl. opportunity cost), such as former investment in machinery and equipment (eg a refinery ), knowledge or developed skills ( eg management of large and complex projects).
- Exclusivity (English exclusivity ), such as exclusive import or distribution rights, licenses to use specific technology or protection.
In the theoretical discussion of the resource approach is the most advanced development of strategy research in business administration. Its value is ( like we do with military strategy formation) primarily in the area of resource analysis
- What resources are available?
- What resources are missing for achieving the goal?
- What resources have no strategic relevance and must be omitted?
And in the area of strategic planning, such as
- Obtain specific machine or machines nonspecific
- Start training wide or focused
- Internationalize or Export
- Etc.
To see. The goal of the analysis is the achievement of a competitive advantage ( persistently higher profit potential) through the unique combination of resources, knowledge and people in the company.