Developing Competitive Advantage Flashcards
What is competitive advantage? And how is it obtained?
- competitive advantage is the ability or capability of a firm to outperform competitors in the marketplace
- SWOT analysis is a useful framework to identify competitive advantages
- firms might know their competencies but might not know how they become advantages
- a detailed SWOT can aid managers identify and develop competitive advantages
How do you make a SWOT analysis as productive as possible?
- Stay focused on using series of SWOT analyses
- Detail description of competitors (present and future)
- Collaborate with other functional areas across the company
- Examine issues from the customer perspective
- Look for causes, not features
- Distinguish internal from external issues
- Base it on facts and relevant internal and external sources
What are the strength and weaknesses in a SWOT analysis?
- they exist because of resources possessed (or not possessed) by the firm or they exist
- due to the nature of key relationships between the firm and its customers, its employees, or outside organizations
- are both in the present situation
- it must be leveraged into capabilities or overcome
- are meaningful only when they assist or hinder the firm in satisfying customer needs
How do firms generally achieve competitiveness?
A combination of:
- operational excellence
- product leadership
- customer intimacy
- brand differentiation
What are the opportunities and threats in a SWOT analysis?
- involve issues or situations that occur I’m the firms external environments (not potential marketing actions)
- should not be ignored due to focus on developing strengths
- may stem from changes in PESTLE
When developing organizational goals what needs to be assured?
- They are attainable (good change they will be met)
- consistent (align and relate to competencies and competitive advantage)
- Comprehensive ( they should cross function within the organization, assumed by all relevant departments)
- Intangible (statement of where we aim to go)
Distinguish between discontinuous and continuous objectives?
Continuous objectives:
- current objectives are similar to previously set objectives in planning period
- objectives slightly modified over time don’t need new strategies, more effort or better implementation
Discontinuous objectives:
- significantly elevate the level of performance on a given outcome factor
- typically require new strategies to achieve higher performance
What is downward stretch?
- company initially located at the top end of the market and then “stretches” downwards to pre-empt a competitor, respond to an attack. May devalue the brand
What can be used to measure brand equity?
- the CBBE model:
- it is a way of assessing the value of the brand in customers minds
- branding can increase profitability in large and small scale businesses by filling in gaps in customer knowledge and by offering assurance - BAV model (Young and Rubicam):
- differentiation: degree to which a brand is seen as different
- energy: brand momentum
- relevance: breadth of a brands appeal
- esteem: how well regarded and respected it is
- knowledge: familiarity and intimacy
What is upward stretch?
- companies stretching upwards to add prestige to their existing range of products
- can be risky due to customer perception and inability of sales people to trade up and negotiate to the new level
- easier to decrease than to raise price
What is two- way stretch?
- extending product lines upwards and downwards to address different segments of the market
What is a strategic focus?
- development of an overall concept or model that guides the firm, weaving marketing elements together into a strategy.
- typically tied to competitive advantages
- use results of the SWOT analysis
- lays the ground work for development of marketing goals and objectives
What are the four make directions the firm considers for its strategic Efforts?
- Aggressiveness
- Diversification
- Turnaround
- Defensiveness
What are marketing goals?
- broad, desired accomplishments that are stated in general terms.
- indicated direction firm attempts to move in and set of priorities it will use in evaluating alternatives and making decisions
- some degree if intangibility
What are marketing objectives?
- specific and quantitative benchmarks that can be used to gauge progress towards the achievement of the marketing goals