A Firm Can Be Said to Have Competitive Advantage When It Has Access to Resources That Others Do Not.
Overview of Competitive Reward Example
Competitive advantage has been divers as the superior performance of the arrangement in comparison to other organizations in the same industry or superior functioning relative to the sector average. It is also be defined equally anything particular an organization does superior to its competitors.
Superior performance tin be defined as in terms of a higher render on investment (ROI), higher render on equity (ROE), turn a profit margins, loyalty brand, goodwill, and reputation.
Examples of Competitive Advantage
Below are some examples
Competitive Advantage Example – 1
Permit united states look at an example of competitive advantage, Tesla Incorporation. Tesla is a visitor that produces luxury cars and loftier-tech technology. If you wait at all the aspects of their business, it tin exist said that they accept no direct competitors based on the industry they operate in and based on the product/services they provide.
Tesla is known for investing about of its acquirement in research and development activities. Their motive is mainly constantly to improve and make high-tech personal transportation. Furthermore, they are trying to reduce the use of oil which is considered as the primary source of energy. Apart from this, they are looking to automate everything. Tesla, for all these reasons and more, is likewise considered as a highly eco-friendly company. All these factors make Tesla stand out from its competitors, and this is expected to stay the same in the future.
Tesla has a focused strategy to stay in the luxury market. However, it is not going to be the same in the future. Tesla is looking at producing cars for personal employ on a big global scale. They are planning to launch more affordable products to the mutual man like Model 3. This will help Tesla get a stronger position in the market as competitors start increasing in this space.
Competitive Advantage Example – 2
Apple products are known for having a differentiation advantage over all its competitors. They take the highest quality, newest applied science, strong brand proper name, loyal customers, intuitive and interesting designs. Apple tree has always fabricated a strong, impactful option on all its customers as well as its competitors past its impactful pattern and innovative structure. For this reason, at present its competitors have started making designs, features, and engineering very similar to Apple tree. Apple can as well be considered every bit a luxury production.
Similar to our previous example of Tesla, Apple too invests a lot of revenue in research and development for developing new products. One more factor which differentiates Apple from its competitors is they don't produce products in volumes as their competitors do. Their products are created carefully to provide the highest client satisfaction.
This strategy has given them an edge over its competitors, and information technology lets them sell their products at a much college price than the same product made by the competitors in the market place. They have been able to do this over the years without taking a hit on the profit margins or market place share.
All these factors make Apple the luxury make that it is today
Competitive Advantage Instance – 3
Now let's expect at a company that caters to the need and makes information technology its competitive advantage. The era of Facebook, Twitter, and LinkedIn all have emerged years earlier. However, now the attention is driven mainly towards messaging and advice. Facebook maintained its position by acquiring two companies with this potential, Instagram and WhatsApp.
Similar to this is a company called Pinterest. It has carved its niche in the market. The company is pretty young and withal has a very high valuation ($12 billion). The company has 200 million subscribers and agile users; near of them are from the US, and approximately 80% of them are women. At the beginning of its business concern, Pinterest grew its concern using the referral model without using the expensive acquisition methods of customer acquisition.
What Pinterest has got is need-based positioning. It provides users who apply the network to buy new things. It was a photo-based concern model which then moved to the activities like sharing some creative arts, interior designs, and style ideas.
Like the other companies, Pinterest also would accept tried to motion in many segments simply is choose not to and was stuck to its core competency of driving the value from an prototype-based design. This has also driven the other market of advertising and branding.
Pinterest not only fabricated revenue simply crossed $100 million in 2015, which then went upwardly to grow by $300 million in 2016, a 3-fold increment. Pinterest has created a lucrative surroundings serving a specific demand and found opportunities in a similar segment.
Competitive Advantage Instance – 4
Now let us look at three similar companies, which, fifty-fifty afterwards existence a like standout, Google, Facebook, and LinkedIn.
Google stands out for existence an effective search engine for the cyberspace. Google was able to succeed considering of the style, market positioning, innovation, and the network event.
Facebook is the biggest competitor of Facebook. One strong competitive reward that Facebook has over Google is that of the network effect. Which then pb to innovation, free advertisement business, and giving fashion for personalized content
LinkedIn, on the other hand, is not like conventional social media. Its master focus is on business professionals, and this is their competitive reward. LinkedIn is known for existence a niche media network.
All these companies being in a similar line, and competitors are still surviving and making adept growing revenues.
Conclusion
While looking at a competitive advantage, it is also required that we look at a comparative advantage. Both these concepts are linked to each other but are non the aforementioned.
A company is said to have a comparative reward when it is able to produce goods and provide services at a lower cost than its competitors. On the other hand, competitive advantage is more dynamic and can be created while the comparative advantage is adamant past a few unchangeable factors.
Comparative advantage can help the company in getting a competitive advantage. Yet, even having a skillful comparative advantage does not necessarily mean that it will have a competitive advantage.
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Source: https://www.educba.com/competitive-advantage-example/
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