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Competitive advantage

Competitive advantage

Every day American businesses supply myriad products and services to consumers. The rational consumer is looking for the best value that can be found within his/her budget. Buyers evaluate products and services based on a variety of criteria. The primary purchasing criteria is the product’s ability to satisfy the consumer’s immediate need, but other decision criteria include price, appearance, quality, warranty, and service. Producers understand consumers’ buying habits and try to design into a product or service some unique characteristics that similar products from other producers do not have. Each producer hopes that the uniqueness of his or her product will induce the consumer to buy it instead of products made by other companies. This added uniqueness, intended to increase sales, is known as a competitive advantage. Within the economic marketplace, producers also study products and services that compete with their own. If one company redesigns a product and includes new features, improves quality, or increases the product warranty, the changes are advertised with the goal of increasing the sales of their product and take potential sales away from the other producers. The uniqueness of competitive advantages like these, however, can be easily copied and duplicated by other producers. So most competitive advantages, such as quality, warranty, appearance, and product packaging, are short-lived. Companies seek a competitive advantage that is not only unique but also is sustainable over extended periods of time. If the advantage cannot be easily duplicated, then it is sustainable over time. Probably the only sustainable competitive advantage that a company has is its employees— the human resources of the organization. It is only through a motivated, challenged, and rewarded workforce that the continuous stream of innovative new and improved products, with controlled manufacturing and distribution costs, can be developed and maintained. John B. Abbott

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