Essay Companys Competitive Moat

competitive advantage Essay examples

1591 WordsApr 7th, 20147 Pages

Competitive advantage(CA) is an advantage competitors gain by providing or offering customers or consumers greater value for their money through product and service differentiation or through lower prices. Maintaining competitive advantage is crucial to many businesses or organizations' success in order to survive in the market. Competitive advantage is characterized by superior performance which could be an attribute to outperform the competitors whether current or potential; or gaining a higher market share in a particular industry thereby ensuring market leadership; or ultimately, maximization of profit.(JOBBER 2010)
This essay will critically analyze how competitive advantage is created i.e. Porter's 3 generic…show more content…

It is a no-frill carrier. They were able to cut cost by operating a no-frill carrier i.e. they don't use tickets or travel agents.
Porter's focus strategy is a mix of both the differentiation and the cost leadership strategies i.e. difference or cost leadership within a small target market segment. For instance: a company should be able to differentiate its products based on a particular target market segment because if the differences in products does not appeal to consumers in that target market as opposed to consumers in broad market, there would be no basis for differentiation and competitive advantage will not have been achieved.
Selecting the Right Competitive Strategy
There are two schools of thought pertaining to how firms should choose the competitive strategy that best suits them. One is of the opinion that firms should choose one of the generic strategies and commit all resources to making it work. Porter belongs to this category. They believe that the value chain necessary for cost leadership is quite different from that of differentiation strategy and that while differentiation deals with better quality, cost leadership deals with lowering costs wherever possible.(DESS and DAVIES 1984) What porter articulated here is that there is need for strategic clarity.
The 2nd school of thought opines that the strategies may be combined together to achieve CA. They believe that superior quality which is as a

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WEMC FS#5-08

Strategies for Competitive Advantage
Cole Ehmke, M.S.
Extension Educator, Department of Agricultural and Applied Economics
University of Wyoming

A competitive advantage is an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and service that justify similar, or possibly higher, prices. For growers and producers involved in niche marketing, finding and nurturing a competitive advantage can mean increased profit and a venture that is sustainable and successful over the long term. This fact sheet looks at what defines competitive advantage and discusses strategies to consider when building a competitive advantage, as well as ways to…show more content…

With the advent of product differentiation and niche and direct marketing, that reality has changed, and now there are niche markets in which both individual and wholesale buyers are looking for products with very specific characteristics or special services. These characteristics often use strategies that don’t focus on costs and volumes exclusively; rather the product or service may be of premium quality, be differentiated from other products and services available in the market (such as organic, natural, or humane production), or have a value-added component
(i.e. flavored meats, pre-washed salad mixes, etc.).
Successful ventures perform a combination of business activities well, including marketing, production, distribution, finance, customer service, and/or other activities important to the enterprise. However, a competitive advantage is often a single key element that gives an edge to a business beyond what the competition has or does.


1. The experience and skills of the top managers. Over half of business failures are directly related to managerial incompetence.
2. Energy, persistence and resourcefulness (the will to make the business succeed) of the top managers. Many business owners have failed or come close several times before their “instant”


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