The document discusses competitive advantage, which is an attribute that allows a company to outperform its competitors through superior margins or value. Competitive advantages must be difficult to duplicate. Examples include access to resources, skilled labor, technology, or low costs. Companies establish advantages by clarifying benefits, targeting markets, understanding competitors, and employing strategies like cost leadership, differentiation, or focus. Strategies involve low costs through scale or differentiating products. Maintaining an advantage is important for business success and survival against competitors.

1. The importance of
CompetitiveAdvantage.
A project by
MONU KUMAR JANGIR

2. What is a
Competitive
Advantage?
 A competitive advantage is an attribute that allows a company
to outperform its competitors. This allows a company to
achieve superior margins compared to its competition and
generates value for the company and its shareholders.
 A competitive advantage must be difficult, if not impossible, to
duplicate. If it is easily copied or imitated, it is not considered a
competitive advantage.
 Competitive advantage is a company’s ability to produce
something more efficiently than a rival, which lead to greater
profit margin.
 Competitive advantage is when a company’s product are seen
both unique and higher quality, relative to those of a
competitor.

3. Examples of
Competitive
Advantage
• Access to natural resources that are restricted to competitors
• Highly skilled labor
• A unique geographic location
• Access to new or proprietary technology
• Ability to manufacture products at the lowest cost
• Brand image recognition

4. Constructing a
Competitive
Advantage
Benefit
 A company must be clear what
benefit(s) their product or
service provides.
 It must offer real value and
generate interest.
Target Market
 :A company must establish who
is purchasing from the company
and how it can cater to their
target market.
Competitors
 It is important for a company to
understand other competitors in
the competitive landscape.

5. Strategies
for Competi
tive
Advantage

6. There are three
strategies for
establishing a
competitive
advantage
 In a cost leadership strategy, the
objective is to become the
lowest-cost producer. This is
achieved through large-scale
production where companies
can exploit economies of scale.
 In a differentiation strategy, a
company’s products or services
are differentiated from that of
its competitors. This can be
done by delivering high-quality
products or services to
customers or innovating
products or services.
 If a company is able to
differentiate successfully, the
company would be able to set a
premium price on its products
or services.
 In a focus strategy, a company
focuses its product or services
towards a narrow-target market
segment
 The focus strategy also has two
variants;
 Cost-focus: Lowest-cost
producer in a narrow market
segment
 Differentiation-focus:
Differentiated products/services
in a narrow market segment
Cost Leadership Differentiation Focus

7. McDonald’s Louis Vuitton Walmart
• McDonald’s main
competitive advantage relies
on a cost leadership strategy.
• The company is able to
utilize economies of scale
and produce products at a
low cost and as a result, offer
products at a lower selling
price than that of its
competitors.
• Louis Vuitton’s
advantage relies on both
differentiation and a
differentiation-focus
strategy.
• The company is able to
be a leader in the luxury
market and command
premium prices through
product uniqueness.
Walmart’s advantage
relies on a cost
leadership strategy.
Walmart is able to
offer ‘everyday low
prices’ through
economies of scale.
Competitive
Advantage in
the
Marketplace

8. Importance
of Competitive
Advantage
 A competitive advantage distinguishes a company from its competitors.
It contributes to higher prices, more customers, and brand loyalty.
Establishing such an advantage is one of the most important goals of
any company.
 In today’s world, it is essential to business success. Without it,
companies will find it difficult to survive.

9. Video
Example
Video Explanation of Competitive Advantage
https://www.youtube.com/watch?time_continue=142&v=9Ch58j0pRug&feature
=emb_logo

10. Thank you
for
watching