What is Competitive Advantage?

The essay helps in critically analyzing the argument that any kind of competitive advantage diminishes over time and this is required to be evaluated in an effective manner in order to understand the different kinds of importance for the organization to gain competitive advantage in comparison to the other competitors in the market.

Furthermore, the different kinds of examples are required to be provided in an effective manner as to understand the different companies which have diminished competitive advantage and the ones which have tried to sustain the competitive advantage in the entire market. The critical analysis along with the scope of the report is to understand and analyze the reasons behind the diminishing competitive advantage of the company.

Competitive advantage is defined as the conditions which helps in allowing the different companies or the country as to produce the different goods along with services of the equal value at a lower kind of price or in a desirable position. These conditions help in allowing the productive entity as to generate the superior margins along with more sales compared to the different rivals in the entire market (Al Shobaki and Naser 2017).

Furthermore, the competitive advantages are attributed to the different kinds of factors which includes the cost structure along with the quality of the offerings of the product along with the distribution network is competitive in nature. Additionally, this was seen and analyzed that there are different kinds of products and services which are superior in nature and this helps the companies in becoming superior in nature and gain competitive advantage in comparison to the other competitors in the entire market (Rothaermel 2016).

 In order to create a proper competitive advantage, this is essential in nature for the company to analyze the different kinds of determinants which are required to be analyzed in an effective manner which will help in managing the different kinds of competitive advantage effectively. There are different kinds of international strategies which is required to be adopted by the companies in the competitive market as this will help in analyzing the corporate level strategy and business level strategy effectively.

With the implementation of the Porter’s Diamond Model analysis, the companies can try to gain more competitive advantage in the entire competitive market wherein the different kinds of conditions are taken into consideration such as the structure of the rivalry firm along with demand and factor condition along with analyzing the different related and supporting industries.

Determinants of Competitive Advantage

The main determinants of the organization in order to be competitive in nature in comparison to the other kinds of competitors in the market includes the following:

Benefit is the first determinant which is required to be analyzed by the company in an effective manner. The respective company needs to analyze the benefits which will be gained from the respective product which will be provided by the company to the different customers in the entire market. The benefit should be something which will be beneficial for the customers which is required by the customers and this will be valued by the customers in the market as well.

Furthermore, the company will be benefitted from the respective product will be developed by the company in an efficient manner which will include the constant awareness regarding the new kind of trends and advancement of technology which will be helpful in delivering the products and gain competitive advantage by offerings the customers with similar products at less cost (Sölvell 2015).

Furthermore, the target market is required to be analyzed in an effective manner by the different companies in the entire market along with analysis of the requirements of the customers in the organization as well. This is the entire and sole responsibility of the seller to understand the needs of the buyers and make their life better as well. This will help the company in creating their own demand and this will be the main driver of the economic growth (Asiedu et al. 2015).

 Competition is the third strategy which is required to be analyzed in an effective manner as to identify the different competitors. The company needs to analyze the different other competitors in the market who deal with similar kinds of services or goods as this will help in analyzing the needs of the customers effectively and fulfill their needs effectively. By analyzing the competition in the market, this is essential and advantageous for the company to understand the prices and the promotional strategies which are being applied by the different companies in the market and this will help in improving their techniques as this will be able to gain competitive advantage in the entire competitive market.

These are the three major determinants which are required to be analyzed by the company in the competitive market as this will help in articulating the different benefits as this will be provided to the target market and be better than the different other competitors in the market. Furthermore, this can be analyzed and seen that the competitive advantage will be gained by the company in creating sustainable competitive advantage. The company needs to create proper goals and objectives along with different operations as to build sustainable competitive advantage and this will be essential in nature as this will help in gaining more competitive advantage in the entire market (Bashir and Verma 2017).

International Strategies and Porter’s Diamond Model

The competitive advantage is essential in nature as this is one of the recognitions which the company will be delivering quality products at lower cost than the other competitors in the entire market. Furthermore, establishment of the competitive advantage will require proper planning and coordination among the different kinds of departments in an effective and efficient manner. The importance of competitive advantage is the different kinds of techniques which will make it worth the entire investment of the company’s success and time in an effective manner (Albrecht et al. 2017).

Firstly, this is the heart of the marketing strategy in which this has been seen that the successful organizations bring into the different kinds of strategies which revolve around the different kinds of areas which are distinct in nature (Lazzarini 2015). The real requirement of gaining the competitive advantage by the companies is crystal clear in nature in which the organizations who have failed in acquiring the competitive advantage in the entire market needed to make the strategy which will work in their favor and this will be advantageous for the company in an appropriate manner (Liao, Hu and Ding 2017).

Secondly, the competitive advantage is the antidote for the superiority of the different competitors is the other aspect which helps the company in gaining competitive advantage. The various activities are required to be analyzed in an efficient manner which will help the company in performing differently from the other competitors in the market and this will allow the company in gaining competitive advantage (Schilke 2014).

In order to gain competitive advantage, this is essential in nature for the company to observe the different other competitors in such a manner which will provide the company with the different kinds of insights to the strategies which are being adopted by the competitors to be more competitive in nature (Porter and Heppelmann, 2014).

Lastly, the competitive advantage is the actual route which is being provided to the companies as to gain long term marketing success in the entire competitive market. The competitive strategy is required to be the one which is required to be such that which will help in gaining huge competitive advantage in an efficient manner and this will help in gaining sustainable competitive advantage in the entire market (Krishna, Ojha and Barrett 2017).

These are the three main importance of the competitive advantage in the different companies as this will help in improving the overall effectiveness and appropriateness of the organization in an efficient manner. Furthermore, the main competitive advantage will help the companies in gaining long term profit opportunity along with gaining the competitive position in comparison to the different kinds of competitors in the entire market. The competitive advantage will help in offering superior value to the different kinds of products which are being sold by the companies to the different customers in the market appropriately (Albrech 2015).

Sustainable Competitive Advantage

For instance- There are different kinds of instances which can be analyzed appropriately in which this can be seen that there are different types of the companies which have gained huge competitive advantage in comparison to the other competitors in the competitive market which provides and deal with similar kinds of products.

There are different online companies in the entire market which are also termed as e-commerce companies. Amazon Prime has been able to gain competitive advantage in the entire market which has tried to fulfill the different orders and shipping is quite fast in Amazon. The ecommerce company is extremely efficient along with accurate in nature wherein the speed is the major priority for the company.

The speed is termed as the competitive advantage in which this has been guaranteed by the customers in the market that two-day shipping on the different products that are Prime in nature are eligible in nature (Cooper 2017). Offering the different customers with two-day service is one of the smart moves which has been taken by the respective Amazon Company for the two major reasons:

This will encourage the different purchases and more purchases from the different customers in the market (Darroch, Miles and Jardine 2015). This has been seen that the major disadvantage which has been faced by the ecommerce is to compare brick and mortar retail is that wherein the different customers have to wait for the different kinds of products as to arrive after purchasing them. Furthermore, Amazon has focused on the speedy delivery of the different kinds of products and services and this has helped Amazon in mitigating the different kinds of risks in an effective manner (Saeidi et al. 2015).

The UberEATS is the other instance or the example which is required to be taken into consideration which has helped in analyzing that there are different individual restaurants in the market which long had their own food delivery services which are being changed by UberEATS is changing the entire game for consumers and businesses in an effective manner.

With the usage of the application of UberEATS, this can be seen that the users or the customers in the respective area can order some items from the online menu of UberEATS and then the officials of the UberEATS will be delivering the respective teams within ten minutes or less than ten minutes as well. The services which are being provided by UberEATS are cheap and extremely easy in nature to purchase as well.

Importance of Competitive Advantage

There are different or various organizations in the entire competitive market in which this has been seen that they have lost their competitive advantage in comparison to the other competitors in the entire market (Toysrus.com, 2018). Toys R Us is one of the examples in which this was seen and analyzed that the respective company has performed in an effective in the early years, however the company has lost the competitive advantage as the preferences of the customers have changed and the company could not be able to analyze the needs of the customers effectively (Simatupang, Piboonrungroj and Williams 2017).

From the above instance of Toys R Us, this can be analyzed and explained that the company has not being able to improve the domestic strategy effectively. This has been seen that the company could not understand the different moves of the local rivalries in the market and this has affected the entire brand image and the competitive advantage of the company in an ineffective manner (Singla and Apoorv 2015). However, previously this has been seen and analyzed that the company tried to invest more on the different kinds of resources which has helped the company in standardizing the product and gained huge market share as well in the entire competitive market.

However, later on in the future stages, this was noticed that the company was not in a particular position as to expand their business and there was huge risk and lack of control in the market as well. There were different other competitors such as Toy Wizard and Lego which were providing the customers with similar kinds of products as of Toys R Us, however at a cheaper price and the toys are quite expensive in nature in comparison to the different competitors in the market. Furthermore, this was seen that the respective company did not have much presence globally and the company has limited kind of global penetration in the entire market as well which led to loss or there are diminishing competitive advantage as well (Asiedu 2015).

As per the Porter’s Diamond Model, this was seen along with analyzed that the company had international presence in various regions however not the entire worldwide (Huggins and Izushi 2015). Toys R Us did not take into consideration the different moves of the other rivalries in the market and this caused loss of the competitive advantage in the entire competitive market as well. In the previous scenario, the company had huge global presence as this was the first company which introduced the different kinds of expensive and branded toys for the customers.

Furthermore, this was seen that the change is pervasive in nature and the different partners of the company are the competitors and the sustainable competitive advantage is the myth as this does not exist for a long span of time as well (Edwin et al. 2016). Additionally, this has been seen that the competitive advantage is no longer about the positioning and this is regarding the fluidity. On the other hand, this was also analyzed that the company did not focus or commit to the strategy of hitting the massive market and this has caused huge loss in the market share of the company in a negative manner (Nan and Tanriverdi 2017).

Lego is the other company which can be taken as the example in which this has been seen that the company tried to sustain the competitive advantage in comparison to the different the competitors in the market (Herrera 2015). The respective company was the biggest competitor of Toys R Us in which this was seen that Lego tried to understand the different kinds of strategies which was followed by the competitor and this provided them with the different kinds of analysis in which this helped and assisted them in becoming more competitive in nature (Lego.com.us 2018). Furthermore, the respective company tried to implement the Porter’s Diamond Model strategies which helped them in gaining competitive advantage in an effective manner.

Firstly, the cost leadership strategy has been used by the company Lego which helped them in producing and selling the products along with services at much lower cost than the competitors (Morden 2016). This has enabled the Lego Company to become the low-cost leader in which this has been able to become more competitive and this has enabled them to become more competitive in nature. Cost leadership is practical strategy for the different companies especially small to mid-sized companies. This is because it helps in requiring high investment as to achieve the economies of scale.

Secondly, the differentiation is the other strategy which is adopted by the Lego Company in the entire competitive market. Lego tried to include the differentiate the different kinds of products with introducing the different kinds of building blocks which was new in the entire market and this was the main differentiation strategy which helped Lego to become more successful in the entire market and the services provided by the company was unique in nature as well. For instances- there are different companies such as Apple and BMW which tried to succeed in the market which will be essential in nature.

This has been seen that the differentiation strategy is viable and common in nature for the different companies in an effective manner. Lego company tried to improve the competitive advantage in which this was seen that the company tried to be a dominant leader in an effective manner by adopting the cost leadership and differentiation strategy and the company tried to include the different kinds of products which were within the entire budget of the different customers in the market.

Lastly the focus is the other kind of strategy which helps the company in order to dominate the niche. Through the help of the focus strategy, the company will concentrate on limited part of the market in an appropriate manner. Lego is one such company in which the respective company mainly concentrates on the limited part of the market and the uniqueness of the company has helped Lego in analyzing the demands of the customers and gain competitive advantage in the entire market as well.

Furthermore, this can be seen that the company Lego tried to focus mainly on the entire market and targeted the customers in the market which has helped them in becoming successful in the competitive market. Additionally, the concept of the competitive advantage is essential and this was undertaken by them in order to be successful against the different other competitors in the market and this was successful for them (Chou 2015).

Therefore, these are the three main strategies which was applied by Lego Company in order to bring more competitive advantage in the entire market. This was seen and analyzed that the differentiation strategy has helped Lego in analyzing and understanding the various needs of the customers and gain more competitive advantage in the entire market effectively as well. It has been seen that Lego tried to develop customer intimacy which will help in anticipating the different needs of the employees in an effective manner. The market selection strategy is essential in nature which has been selected by the company Lego and they tried to expand their market operations in various countries and the global penetration rate was huge in the entire market.

Additionally, the internationalism potential of the company was determined by the respective company in the entire market which is competitive in nature. This was seen that the company tried to improve their presence more effectively in different parts of the country and this will help in managing the different kinds of the activities in an appropriate manner.

From the above scenarios, this can be analyzed and identified that there are different kinds of issues which was faced by Toys R Us and on the other hand, there were different kinds of the competitive advantage which was gained by the company in an effective manner. There are different other examples of the companies which have diminished their competitive advantage in comparison to the other competitors in the entire market. In case of Toys R Us, this was seen that the company was not in a position to gain competitive advantage which created ineffective positioning of the company. This was seen that the company was not being able to gain competitive advantage in the entire competitive market which led to huge decline in the sales of the company as well.

On the other hand, this was seen that Lego tried to gain competitive advantage in the entire competitive market by focusing on the Porter’s Diamond Model in which the company mainly focused on the various types of the different kinds of long term success of the company in a positive manner. Furthermore, this was seen and analyzed that there were different kinds of toys and the different kinds of other building blocks in the company for the different customers in the entire market (Riasi, 2015).

This was seen that the company Lego tried to mainly focus on the various types of products which can be bought by all the individuals in the entire market. The differentiation and cost leadership strategy were implemented by the respective company and this helped them in being successful in the different kinds of ventures and they were successful as well in the competitive market. The focus strategy of Lego has helped them in becoming successful in becoming more successful and tried to gain more competitive advantage in the entire market (Rothaermal 2015).

Conclusion

Therefore, this can be concluded that the competitive advantage is essential in nature for the different companies in the entire market as this helps in providing various kinds of competitive advantages in comparison to the other competitors. The two examples have been taken in which this was seen that the Toys R Us is one such company which tried to sustain the competitive advantage, however the company could not gain competitive advantage in the entire market.

 On the other hand, this was seen that Lego was the other brand in which this was seen that the company mainly focused on the various kinds of strategies in which this has helped the company in becoming successful and this was effective in nature to become more successful. The focus strategy and the differentiation technique which was followed by the company was effective and this was helpful for the Lego company to gain competitive advantage over the main rivalry Toys R Us in the entire market.

From the above, I feel that the competitive advantage is essential in nature which can be gained by the companies by analyzing the moves of the competitors and this helps the companies in gaining more competitiveness in the tasks which are being performed by them.

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