According to Barney (1991), a firm can be said to possess competitive advantage when it achieves superior performance over its competitors by implementing a value-creating strategy that is not simultaneously being implemented by a competitor. TJ is Barney differentiates simple competitive advantage from sustainable competitive advantage, which is more durable because existing or future competitors cannot duplicate the benefits of the company’s strategy. Recommendations and
Businesses who promote high standards of ethics, and morals in their business scheme are more likely to succeed in the long term. Unethical businesses are more likely to generate a lot of profit in the short term but their revenue will tend to gradually decrease on the long term if their behaviour remains unchanged. Ethical business are as successful if not more successful as less ethical businesses. Businesses around us crave money so much that they forget the impact that the process through which they go through to make their goods will have on their respective communities but also on society as a whole. Ethics in the business world means acting in a fair and honest way that will promote the business without harming the
As explored in the previous section, ethical behaviours can contribute to long term profit and sustainability, whether it is through building trust of customers or avoiding legal problems. However, this is obviously not always the case. Many corporations have turned to unethical practices and since their decision making process is rational, these corporations must have reasoned that the profit of the unethical behaviour outweighs the safer, long term benefit of ethical behaviour, a view that is contrary to popular belief. This is especially true in large multinational corporations, where they have the ability(in terms of wealth and establishment) to face up to consequences of their unethical behaviour, and ultimately still
This method will make a firm’s products less susceptible to cost pressures from the competitors because there are some customer are willing to pay extra fee to have the product with the acceptable request when they see the product is unique and difficult to find in other place. If Tesco work together with others brand, it may come out with the more unique and distinctive product compare with others competitors because the products couldn’t have sell in other market or store. Despite this, the cost of the differentiated product will be higher than non-differentiated products. Thus, Tesco
The location of the business can either work as an advantage or as an disadvantage to the business – if a high quality business is situated in a low quality area the potential customers wouldn't be as high as if it was in a high quality area; this also works for low quality or smaller businesses, they would be more successful in a lower cost area where the people cannot afford to buy the highest quality products. As this only affects the consumers in the area the other side can be the staff – the location can be a major factor when deciding whether to operate at a particular business or not,
In order to sustain among other competitors, Ryanair Holding should evaluate their strategy which is low cost business level strategy in the long run. This strategy alone is not a basis for competitive advantages, nor are advantages sustainable over time. This is because it can only be regard in helps Ryanair to increase its revenues or to lower costs. The firms also derive a temporary advantage because competitors quickly imitate or substitute for it as things that an organization own. Since economy is further growing, Ryanair faces a lot of challenges in maintaining their revenue growth while keeping ticket prices low.
First of all, it’s an access to attract talents who want to work hard to gain the profit rather than take a salary as an employee. Secondly, it’s a good way to obtain expansion capital. Thirdly, franchising can help companies minimize the growth risk, which means a franchising company could put relatively little money into adding a location. Then, according to Startups Team (2003), franchising can also provide company a well-known brand which can lead to a big
Companies in this case often prioritize cost leadership over the product innovation and development; they offer cheaper product version and compromising valuable features and functionality in the proces. However, there is no reason to think that those consumers do not value the state of art technology but on the contrary. Studies by Boston Consulting Group found that emerging markets consumers gain more utility from state of the art features where as consumers in developed markets focus on whether features solve their problems if the features are ground breaking or not is not important (relatively
Maximization of profit used to be the main aim of a business and financial management till the concept of wealth maximization came into being. Wealth Maximization is a superior goal compared to profit maximization as it takes broader arena into consideration. Wealth or Value of a business is defined as the market price of the capital invested by shareholders. Both Profit Maximization and Wealth Maximization have their challenges: Profit maximization is an obvious goal of management, but it does not necessarily imply that short-term profit increases will produce long-term sustainable gains. For example, a reduction in product quality that lowers production costs will produce a quick increase in profit, but lowered quality standards can also tarnish a company 's reputation and provide the competition with an advantage.
A branded product manufacturing company doesn’t focus on the reduction of the price of the product, but on providing the quality product on time. Too much reduction of the price can also make the customers to have a negative impact on the product and thus can affect the future sales of the same. When a competitor undercuts your company 's pricing structure for products or services by offering them at a lower cost, it can present a serious challenge to sales, particularly because many firms are still operating at narrower margins in the wake of the economic