A competitive advantage is an advantage in some way that has a company to other companies in the same sector or market, and allowing you to have a better performance than the companies and thus a competitive position in the sector or market. Some areas in which a company could have a competitive advantage are the product, the brand, customer service, production process, technology, personnel, infrastructure, location, distribution, etc. which it is a competitive advantage For example, a company might have a competitive advantage in the following cases: to have a single innovative product and difficult to imitate by competitors, which allows you to differentiate or distinguish this. to have a valuable brand that allows that any product entering
INTEGRATION: STRATEGIC PROCUREMENT AND COMPETITVE ADVANTAGE Integration of strategic procurement and competitive advantages in an organization leads to basic competencies such as having access to raw materials, suppliers with an effective system for measuring quality of products supplied; develop advantage over competitors in relationship with suppliers, working close together with suppliers on product development efforts and close working relationship with suppliers to improve each other’s processes. This will foster benefits for both company and the supplier organization, while providing the maximum transaction value in the long run. Sourcing or procurement is the main aspect of a business organization when considering inputs. Sourcing is the methodology of finding the right supplier, right product, in the right time, at the right price, in correct quantities and right qualities. Sourcing strategy can be illustrated in the following process.
To do this it needs to have a competitive advantage over its its rivals. A competitive advantage is something a company does better than its rivals that gives it an advantage over its rival. Porter (1988) states that a firm performs many activities that can contribute to a firms relative cost position and create a basis for differentiation which can create a cost advantage that gives a firm a competitive advantage over its competitors. A company’s competitive advantage and competitive strategy are both interrelated. Competitive strategy is defined by Porter (1980) as a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.
This personality, whether the junior president for international logistics or the leader of the firm, can then become the concluding arbitrator to make a decision the firm’s priorities. Decentralized logistics management • When a firm serves many international markets that are dissimilar in nature, sum centralized might leave the firm indifferent to local adaptation needs. If each supplementary is made a profit center in itself, each on carries the full accountability for its performance, which can lead to greater local management satisfaction and do better adaptation to local market conditions. • Yet often such decentralization deprive the logistic function of the benefit of c-orditions.for instance, although head office referring to its large volume of overall international shipments may be able to extract bottom rates from transportation firms individual subsidiaries by themselves may not have similar bargain power. • Once products are within a specific market, however, increased input from local logistics operations should be expected and encouraged.
Competitive advantage is a term used in the business warzone between commonly large companies that compete to obtain the highest costumer population for their business fields. Competitive advantage is literally an advantage that a company or an organization possesses which enables it to shine brighter than the other competitors in the competition; it is what makes your business unique in comparison to the others. The question now is how? How can you acquire a competitive advantage in the global market? To answer this question, you must first be familiar with three major determinants of acquiring competitive advantage: what to produce, for whom, and with whom you are competing.
Dunning in 1979. This model identifies three main factors that leads a company to internationalize: 1) Factor O of ownership, that is the advantages link to the factor’s property, for example production skills or managerial or entrepreneurial specific skills. Ceteris paribus the greater the competitive advantages of the investing firms, relative to those of other firms the more they are likely to be able to engage in their foreign production. 2) Factor L of location, that define the advantages link to the localization that is the advantages link to the characteristics of the host country, as for example natural resources, the infrastructures or the availability of workforce. The more the immobile, natural or created endowments, which firms need to use jointly with their own competitive advantages, are located in foreign market, the more firms will choose to augment or exploit their O specific
Home-based suppliers who boast international competitiveness serve to work with others in their own and related industries to promote the creation of innovations within groups of interrelated organizations. The cooperation of related industries can also aid in providing competitive advantages, especially when it indirectly supports the creation of new skills in other industries. When both of these players work together to promote the competitiveness of a region, they must have “short lines of communication, quick and constant flow of information, and an ongoing exchange of ideas and innovations”. (Porter M. E., 1990, p. 228) However, this is only possible if all companies work together, which identifies the importance of cooperative clusters and the advantages of geographical proximity. In addition, internationally competitive firms lead all members of related and supporting industries to gather knowledge about worldwide needs and possibilities for
Strategic sourcing is a vital initiative of lashing down the cost all over the supply chain. Regardless, the expected availability of specialized assets coupled with low cost labour advantage, the functionality of a compactly interfaced international manufacturing system lead to a flexible enterprise in the course of prospective dual sourcing and shifting the manufacturing in reaction to the demand and cost variations (Flaherty, 1986). However, there are quite a few conflicts amongst the scholars in the industry regarding the cost – benefit equation of International sourcing. For instance, Reich (1991), points to the entrepreneurial and the subsequent technological development that substantially shrink the cost and expedite the information flow and the physical transportation making the international sourcing possible. However, Curtain (1987) finds that the organisations outsourcing habitually miss to consider the added costs of sourcing, specially, intangible costs like the low flexible and the prospective competitive loss in primary
Maintain And Improve Competencies: A good strategy will be to develop the capabilities, and to build and maintain competencies in order to keep an advantage over other competing firms. One must understand market conditions and the firm 's strengths and weaknesses in other to do this. 5. Overall cost leadership through efficient scale facilities and vigorous cost reductions. This can be achieved through the following: Cost
Competitive strategy is a suit of methods and action sequence deliberately planned and put into place by companies in the face of market competition. This seems to be a clear way of keeping their market shares, expanding sales and managing the product lines to deliver desired results. The corporate world often needs some sorts of solid strategies considering the trends of the market competition. Beyond the issues of quality and distribution, companies often need to plan ahead and protect their market share in the sale. Particularly, the companies which function in the production and distribution of goods which come in a wide variety of supply in the market where technology becomes a critical driving force and a major concern is the fact that the market seems to depend on the internal and external business factors which may change rapidly as tides move and the market forces come into play.