Sustainable Competitive Advantages Flashcards
How businesses keep their customers despite competition:
Unique Selling Proposition:
something that can’t be copied by another firm (ex. patented technology / exclusive distribution / knowledge)
EX: Pharmaceuticals / Google Driverless Car
Lower Production Costs:
very cost efficient
EX: Honda Plant in Canada vs. U.S.
Creating Customer Loyalty:
building personal relationships
EX: Favourite restaurant / Mechanic / Hair Stylist
Servicing a Niche Market:
specializing in a very small, specific aspect of the market
EX: Pet Hotel / Wine Seller Architect.
Non- Sustainable Competitive Advantages :
Competitive advantages that can be easily copied by competitors to steal market share:
Promotion (i.e. “Roll Up the Rim to Win” contest)
Placement / Location
Price
Quality
Benefits of Use
Design Features
Competitive Advantages For Services
Services (intangible) get their competitive advantage through:
Convenience:
Making an activity as comfortable and easy as possible for the consumer (ex. Self serve)
Competitive Advantages For Services
Degree of Service:
More services offered in one location → the better
(ex. Gym offering weights vs. Gym with weights, spa, pool, squash courts, etc).
Competitive Advantages For Services
Personalized Treatment:
Services that are personalized to each customer
(ex. Personal trainer, nutritionist, massage therapist).
Competitive Advantages For Services
4. Selection:
More selection → better service
Competitive Advantages For Services
5. Reputation:
Better reputation → more loyalty & able to attract new customers (EX: people always complain to others if they receive bad service – word of mouth)
Competitive Advantages For Services
6. Price
If it’s a similar service to something else → a lower price is preferred.
Product Service Mix
Definition: When BOTH a product & service is provided.
EXAMPLE: HOME DEPOT
What services does Home Depot provide that add value to the
products they sell, and make it more competitive?
Free Delivery (if spend over $200)
Professional Advice
Home Improvement Seminars
Installation Services
Harvey’s
Market Share:
The percent of the competitive market that a specific product or service controls.
Ex: Beverages, fast-food, airline, shoes
Market Segment:
A narrower portion of a specific market share (defined by a particular characteristic)
Ex: Juice is a market segment for the beverage industry.
What’s another segment for the beverage industry?
Could the juice segment be further segmented?
