Introduction
Competition resources refer to all company resources and capabilities that can give the business a competitive edge in the market. This can take many different forms but is often related to productivity and profitability in relation to a particular market. There is a four-level model of competition resources which can help managers to better assess the competitive advantage of their business. This four-level model, pioneered by Michael Porter and popularized by Robert Reich, includes four key categories: finite resources and assets, skills and knowledge, competitive scope and market scope, and competitive strategies.
Finite resources and assets
At the most basic level, there are finite resources and assets and this includes tangible assets such as buildings, machinery, research and development centers and patented products. These types of resources can be easily valued and often provide businesses with major competitive advantages. For example, a company that has a patent on a product or process will be able to easily differentiate itself and leverage this advantage over competitors. Additionally, having physical assets in the right regions can give businesses a major edge, since the ability to deliver goods quickly will be beneficial.
Skills and knowledge
The second level of competition resources consists of skills and knowledge. This includes the expertise of the employees or any specific production processes that are used by the business. Having a talented and experienced workforce is essential for any business that is looking to gain a competitive edge and can provide a major advantage over competitors that lack the necessary skills and knowledge. Additionally, having unique production processes to streamline production is also beneficial and can have a major effect on the business’s profitability.
Competitive scope and market scope
The third level of competition resources is competitive scope and market scope. This includes the overall area in which a business operates, as well as the markets it enters. By having a wider scope, businesses will be able to access new opportunities and customers, which can help to increase market share. Additionally, having a deep understanding of the dynamics of a market can give businesses an advantage over competitors, since they will be able to better anticipate future changes and capitalize on potential openings.
Competitive strategies
The fourth level of competition resources is the development of competitive strategies. This includes the overall approach that a business takes towards competing in the market and how it plans to differentiate itself from competitors. This can take many different forms, such as pricing strategies, channel strategies, product differentiation and marketing strategies. The development of effective competitive strategies is essential for businesses that are looking to create a major competitive edge.
Conclusion
In conclusion, the four-level model of competition resources is a useful tool to assess the competitive advantage of a business. This model consists of four distinct categories: finite resources and assets, skills and knowledge, competitive scope and market scope, and competitive strategies. Each of these categories is important in its own right and businesses need to consider all of them when looking to create a competitive advantage in the market.
