Introduction
The concept of assessing and measuring one’s competitive advantage over its peers is referred to as competitive intelligence. It determines an organization’s ability to survive, compete and succeed in a highly competitive business environment. In essence, competitive intelligence is essentially a process to gain an in-depth understanding of a company’s competitive requirements in order to plan and implement strategies that are best suited to battle and defeat competition effectively. Measuring and assessing organizational competitive advantage requires looking at a variety of factors, including the relative strength of the competition and the current market conditions. Competing firms should be aware of the current trends, including the market structure, technology, consumer behaviour and industry regulations which can influence how firms compete.
What Is Competitive Advantage?
A competitive advantage is any factor which makes a company superior to its competitors, enhancing its ability to survive in a highly competitive environment. Companies can derive competitive advantage if they possess unique resources and capabilities that others lack, such as access to capital, specialized knowledge and/or technology, strong customer relationships, and a strong brand name. A well-recognized brand name helps companies retain customers and gathers them loyal following of users with the same preferences.
Competitive Advantage Assessment
Assessing a company’s competitive advantage requires a detailed analysis of its current environment, both internal and external. This analysis should include:
• Competitor analysis: It is essential to gain in-depth knowledge about the competition. This involves looking into their product range, pricing, competitive tactics and overt strategies which are employed. A competitor analysis will help assess the amount of competitive pressure a company is undergoing, and provide insights for competitive response.
• Technology assessment: Here, the focus is on the technological resources that a firm has access to, and its advantages and limitations. This includes looking into the core technology, existing systems, applications capabilities, research and development programs, and more.
• Market assessment: Here, the focus is on analysing the current market conditions, including the target market/segment, industry conditions, customer preferences, etc. It is important to understand market trends and where a company sits in the current market.
• Value chain assessment: Value chain is a concept that helps identify and assess the various activities contributing to the production of a product/service and delivering it to the customer. Analyzing the value chain helps uncover inefficiencies, areas of overspending, opportunities for the firm and so on.
These assessments need to be supplemented with the development of comprehensive, detailed and realistic scenarios about different product or options. These scenarios help businesses to better understand the implications of their decisions, plan for different contingencies and optimize their resources, capabilities and organization to gain a competitive edge.
Conclusion
Competitive advantage assessment is a process that helps organizations stay ahead of their competition, innovate and adapt to changes in the business and market environment. It assesses the ever-changing market conditions, competitors’ strategies, technological capabilities, and more to provide insights that can be used by the organization to strengthen its competitive advantage. A thorough and accurate assessment of the organization’s competitive edge over its peers not only allows businesses to survive in a highly competitive environment, but also to grow their businesses and ultimately maximize their profit potential.
