competitive advantage + adding value

1.1.3

what is competitive advantage?

what makes a business better than its rivals, allowing it to achieve higher profit or more customers.

define ‘added value’

the difference between the price of a product to how much the consumer is willing to pay for it.

example:

materials price: £5

selling price: £3

added value: £3

list 10 ways to achieve competitive advantage

reliability

quality

reputation

advertising

branding

customer service

convenience

added value

price leadership

innovation

how is competitive advantage achieved through reliability 

because the product keeps doing what it is designed to do

eg: apple, cars

how is competitive advantage achieved through quality

offering higher quality products than rivals 

how is competitive advantage achieved through convenience?

some companies seek to be the best by offering convenience to the shopper

eg: stores which are easy to walk to

how is competitive advantage achieved through advertising?

through successful marketing

how is competitive advantage achieved through branding?

some campaigns seek to do the best through specific branding.

what is product differentiation?

where a product is different from the competitors product in some way.

methods of product differentiation

reputation

customer service

product features

how can a business ‘add value’

design - develop a new technology / design features to make their product unique and different (product differenciation)

production - achieving quality and efficiency adds value

marketing - creating an image that makes the product more desirable, a brand differentiation advantage