Competitive advantage

 

 

The concept of competitive advantage

The competitive advantage, like other concepts, has defined several points of view, although it is directed in one direction in general, but no specific and clear definition has been developed for it. Among the most important definitions given to competitive advantage, we find the following

Definition of "Michael Porter" (M. Porter): The competitive advantage arises as soon as the organization reaches the discovery of new methods that can be embodied in the field, which are more effective than those used by competitors, in other words by simply creating a process of creativity in its broad sense

Porter through this definition linked between competitive advantage and creativity that leads to the creation of new ways of working, whose application allows achieving greater effectiveness than other competitors

Definition of “Kotler”: “A competitive advantage is an advantage over competitors that an organization gains by offering more value to consumers, either through lower prices, or by providing greater benefits that justify higher prices.” Competitive advantage according to this definition is a value that the organization provides to consumers, unlike its competitors, in the form of lower price or greater benefits that justify the increase in the price

It is also defined as follows: An organization achieves a competitive advantage when it can implement strategies that create value for the consumer, which current or potential competitors cannot implement, and when these competitors cannot obtain the benefits of applying those strategies

This definition linked the competitive advantage to the strategies applied by the organization in order to create value for the consumer, and indicated the need for these strategies to be difficult to imitate by competitors

Through the above, the competitive advantage can be defined as follows: “The competitive advantage is the characteristic or group of characteristics that gives the organization superiority over its competitors

The goal of achieving competitive advantage is related to two main dimensions

- The perceived value of the customer: What is meant is that in order for the organization to excel in achieving a competitive advantage, it must exploit all its capabilities in order to improve the value that the customer perceives for the goods and services it provides, which helps to achieve and build the competitive advantage, where the customer perceives and feels that he gets Higher value from dealing with this organization, he repeats his purchase and loyalty of the products of the organization compared to the products of its competitors, which enhances this advantage

- Confirming a state of excellence: by offering a commodity or service that competitors cannot easily imitate, that is distinct, unique and has a high value from the consumer's point of view, through optimal employment of resources and capabilities, which ultimately leads to greater benefits and returns

The importance of competitive advantage

In general, the importance of the competitive advantages of the organization is reflected through

It gives the organization qualitative and quantitative superiority and preference over competitors, and thus allows it to achieve high performance results

Makes the business organization outperforming or in the value of what it offers to clients, or both

It contributes to the positive impact on the perceptions of customers and other dealers with the organization and motivates them to continue and develop the deal

The fact that the competitive advantages are characterized by continuity and renewal, this allows the organization to follow development and progress in the long run

Due to the fact that the competitive advantages are based on the organization's resources, capacity and merit, therefore, it gives mobility and dynamism to the internal operations of the organization

Characteristics of competitive advantage

The characteristics of competitive advantages are supposed to be understood in the context of a correct, comprehensive, and continuous perspective, so these characteristics can be embodied as follows

The competitive advantages are relative in comparison with competitors or comparing them in different time periods, and this characteristic distracts the organization from understanding the advantages in an absolute difficult to achieve framework

To be renewable according to the external environment on the one hand and the internal capabilities and resources of the organization on the other hand

To be flexible in the sense that competitive advantages can be replaced by others easily according to considerations of changes taking place in the external environment or the development of the resources and capabilities of the organization on the other hand.

That the use of these competitive advantages be commensurate with the goals and results that the organization sees to achieve in the short and long terms

Dimensions of competitive advantage

There are a set of dimensions that are considered as entry points and precedents for the competitiveness of the organization, as the latter can distinguish in several ways, such as offering the cheapest, best, newest or fastest. These dimensions have been classified by researchers into four: cost, quality, time and flexibility, and some have added to them a fifth dimension, which is creativity

Cost

It means the ability of the organization to produce at the lowest possible costs compared to its competitors, as the proportionality between the cost of providing the product and the specifications in it is taken into account, and as a result, the organization will achieve a competitive advantage through lower prices, based on its lower costs, which enables it to sell at the same or lower prices, which is what It means maximizing returns

 Quality

The word quality is often used as a synonym for the word quality that takes dimensions other than quality, as it is used to define the source of the product, its shape, color and composition, while quality is a more accurate concept that revolves around the specifications and characteristics of the product that are elaborate, unique and compatible with certain specifications

Quality has been defined as the sum of the features that the product has that would suit the aspirations of the customer, whether conscious or unconscious as well

Hence, quality can be defined as the set of distinct and unique characteristics in the product that are perceived and aspired by the customer, and these characteristics are related to the product design and its formal and functional characteristics alike. Therefore, it is considered a motivating factor and satisfying customers, which will allow the organization to sell its products at reasonable prices and achieve a high market share

Time

Time has become a factor of great importance in the essence of the purchasing decisions that it can make, and accordingly, many business organizations have begun to compete by adopting a new dimension, which is the speed of delivery and response to the customer's request, given that the organization that can respond more quickly to the customer’s request can achieve opportunities Sales before others, and this is reflected in its competitiveness in achieving a privileged position for the product or the brand in the mind of the consumer

Flexibility

This dimension came as a result of the state of technological development and innovation, and thus it is a new situation produced by environmental changes, and cost and quality have become traditional dimensions. Flexibility means the ability of the organization to offer different levels and varieties of the target market

Creativity

Often different literature mixes between creativity and innovation, although the latter is related to exploring a distinctive new idea while the first means the actual embodiment of this idea in the form of a specific product that the organization provides to the market, and perhaps this mixing is considered intentional by some writers on the grounds that creativity reflects an advanced stage From innovation and to embody it