Strategies for creating competitive advantage
Growth and development is one of the vital goals of any business. For this reason, in continuation of yesterday’s discussion, we will examine strategies for creating competitive advantage:
Alliance strategy
Collaborate with business partners, in the form of partnerships, alliances, special partnerships or virtual companies. This strategy creates synergy, allows companies to focus on their business and create opportunities for company growth. These alliances have many fans, especially in e-commerce projects. Of course, strategic alliances with suppliers can also be seen and are particularly attractive. Some of them electronically monitor the warehouse stock and replenish it whenever the stock drops below a certain level. For example, Walmart and Master Builders.
In the competition-cooperation strategy, alliances are formed between competitors. For example, airlines in global alliances such as one world and star alliance compete with each other to sell tickets on some routes, but as soon as the tickets are sold, they cooperate by sending passengers to competing planes to avoid half-full planes (for example, Stay with Lufthansa, they say you can go with Turkish Airlines). Basically, the most famous strategic alliances are seen in airlines.
Innovation strategy
Introduce new products and services, add new features to existing products and services, or create new methods of production. Differentiation transforms existing products and services to offer a special and different product to the customer. But innovation is so new and different that it changes the nature of the industry. For example, introduction of ATM by Citibank. The convenience and affordability of this innovation gave Citibank a great advantage compared to its competitors. Like many innovative products, ATM changed the nature of competition in the banking industry so much that it is now considered a competitive necessity for every bank. The key point in providing innovation is the need for its continuity. That is, when a company introduces a successful innovation, other companies active in the industry must try to imitate it or improve that innovation and thus respond to the threat posed by the competitor.
The strategy of creating barriers to entry
Create barriers for competitors to enter. Companies can create barriers to entry by offering innovative products or using information technology to provide exceptional services. For example, you can tell us about Priceline’s innovation in the price business model. So, companies can create barriers to entry by creating switching costs for competitors or suppliers. A classic example of this is organization-to-organization business in the automotive industry, the Cavicente electronic procurement system that keeps car manufacturers as customers and parts manufacturers as dependent suppliers. So, by keeping customers dependent, the company raises the barriers to entry.
Sincere
@startup_30T
This post is written by Rimaazz1