Competitive Advantage Analysis Model
Competitive advantage analysis is an important tool for businesses to understand their overall competitive environment. It helps businesses consider their strengths and weaknesses, and identify where improvements may need to be made to successfully compete in their market. To adequately assess the competitive environment, it is necessary to use a model that can evaluate the factors that determine an organization’s competitive advantage. The following analysis will examine a model that businesses can use to analyze their competitive advantage.
The model describes the competitive environment in terms of four elements. These elements are unique core competencies, customer value propositions, distribution channels, and technology. Unique core competencies encompass the skills, abilities, and knowledge that make a business distinct from other firms in the market. A focus on unique core competencies allows companies to better understand their competitive advantages and develop competitive strategies based on their advantages.
Customer value propositions refer to the benefits that a company provides to its customers. These benefits should focus on satisfying customers needs and delivering superior value. Companies should evaluate their customer value proposition in terms of: price, quality, choice, convenience, delivery time, customer service and other factors that can affect customer satisfaction.
Third, distribution channels refer to the avenues through which a company’s products and services can reach the market. This includes the physical, online and other means of distributing the company’s products and services to potential customers. Understanding the distribution channels employed by competitors is key to creating a competitive edge in terms of product availability and price.
Lastly, technology is a major factor influencing competition. Technological advancements can create both cost advantages and new ways of doing business which can result in innovative products and services, or distribution channels. Companies should evaluate the technology used to support product delivery and customer service delivery.
The ability to analyze competition using the four key elements of the model described above will enable businesses to think strategically and make informed decisions. For example, if a company’s unique core competencies do not match up with their customer value proposition or their technology is not able to support their distribution strategies, then the company can focus on improving those areas. This would give the company an advantage over its competitors and increase its chances of success.
Understanding and leveraging a company’s core competencies and customer value proposition, creating and managing efficient distribution channels, and deploying technology to it’s fullest potential are essential to success and maintaining a competitive advantage. This can be achieved by thoroughly analyzing the competitive environment: understanding competitors products and services, evaluating marketing and pricing strategies, and studying customer needs and wants. A comprehensive competitive analysis can provide businesses with an accurate picture of the competitive environment and help them determine the most effective strategies to gain a competitive advantage.
