3.2 RANGE OF STRATEGIES THAT CAN CONTRIBUTE TO A BUSINESS COMPETITIVE ADVANTAGE When a business thrives in gaining competitive advantage, it often sets eyes on a manifold of strategies that aim to em-better its image and its competitive positioning. It focuses on strategies that may help increase its rate of consumers acquisition, retention and satisfaction; strategies of industry and competitors analysis. Moreover, it sets eyes on those strategic process to build strong investments portfolios ( Liquidity) that can help establish longevity and leadership in the market. Competitive advantage inevitably leads to faster, continual exponential growth, increased sales, market share gains and overall business profitability. Competitive
The more complex the product portfolio EMC offers becomes, the more expensive it becomes to train each salesperson, to offer the information on the web 2.0 platforms, and to compete with other businesses in the marketplace. This is because a smaller, but more focused competitor can dedicate all its resources and knowledge to providing very specific products and customer service. This could be difficult for EMC to keep up with because they have such a large operation that they might be a bit slow to change and adapt to the competition. While a customer centric business model is critical to EMC’s success, it can also be cumbersome to the company’s ability to change and adapt. There is a concession to this argument that a more customer centric employee will be able to better serve the customer in a shorter time frame and actually offset the cost of the training by being able to serve more customers in a shorter time period.
It also, makes the company look bad and not stable. Finance is losing money which is due to the fact that inventory is high and the cost to store them is on the company’s dime. A production leveling strategy is when there is a continuation of producing an amount equal to the average demand. One of the advantages to this strategy is that is results in a smooth level of operation. Month 1 2 3 4 5 6 Forecasted Demand 600 750 1000 850 750 700 Month 1-6 if added equals to 4,650.
When a firm has a larger output, the firm is also hard to manage and this brings extra costs. Eventually, when the firm has reached a certain size, these extra costs will outweigh the marginal benefits and thus there are no cost benefits anymore (The Economist, 2008). Economies of scale can be internal or external: internal economies of scale are cost advantages for the specific firm, regardless of the industry it operates in. External economies of scale are economies that are beneficial because of the industry a firm operates in (The Economist, 2008). In the fashion industry, brands like Zara, focus on economies of scale for internal production activities that are cost advantageous (Christopher, Lowson & Peck,
This will save on time and cost of operation and help in creating clear and precise business level strategies. Though effort has been put to up the competitive advantage, more is still required. In Resource Based Analysis, the capabilities and competencies of Barclays cannot meet the VRIN criteria in its full view. First is the value criteria. Based on the products offered by Barclays most of the customers seem to be getting what they envisioned while contracting the services offered by Barclays.
The factory system assisted the economy to grow because the previous system was falling behind as it tried to provided for the great demand of goods. The rising middle class also helped for the factory system because those people could afford more expensive goods like cotton ore china. It occurred to traders that they could mass produce goods in greater quantity at a cheaper price, they could find more consumers and make a higher profit. Cycle works as follows: increased consumer demand prompts entrepreneurs to invest in machines to speed up production, and thereby increase profit. Profit from increase production used to invest further innovations and inventions.
One explanation appeals to be behavioral traits; the managers acquiring firms may be driven by overconfidence in their ability to run the target firm better than its existing management. This may well be so, but we should not dismiss more charitable explanations. For example, Firms can enter a market either by building a new plant or by buying existing business. If the market is not growing, it makes more sense for the firm to expand by acquisition. Hence, when it announces the acquisition, firm value may drop simply because investors conclude that the market is no longer growing.
Often a firm begins using sales promotions to differentiate its product or service from the competition. If the promotion is successful and leads to a differential advantage (or even appears to do so), competitors may quickly copy it. When all the competitors are using sales promotions, this not only lowers profit margins for each firm but also makes it difficult for any one firm to hop off the promotional bandwagon. Percy (2008) on the other hand contend that there are costs associated with promotion, and when a promotion is too successful, the unexpected increased costs can have a
However , Puma normally uses premium pricing strategy because Puma views its brand as premium. Premium pricing strategy means maximizing profit in areas where customers are happy to pay more. For Puma , premium pricing strategy may not be the best pricing strategy as nowadays , there are more and more price buyers , which means people who buys products at the cheapest place and only see the price as the only consideration . Even when price buyers were once a loyal customer of the company, if this strategy continues , they may not still be loyal and may go to other cheaper companies to be their loyal customer. 5 P : People Puma has always provided high quality customer service to customers and sales would provide trailor-made services to clients.
This lowers average costs in the long run through, for example, better use of technology or employing specialized managers. Economies of scale also give a business a competitive edge if cost savings are then passed on to customers in the form of lower