Competitive advantage
Competitive advantage is the ability for a company to outperform its competitors. In today’s rapidly changing global environment, organizations are increasingly becoming innovative and changing the way they carry out their activities in order to remain ahead and relevant in their respective fields of work. There are many ways through which organizations can put in place in order to be ahead of other when it comes to competition. Low cost and product and service differentiation is just some of the strategies (Jones & George, 2011). Thus, a company can be said to have achieved competitive advantage if it manages to return profits that are at a higher rate than the average rate across the industry they operate in.
There are several building blocks of competitive advantage and these include efficiency, quality, innovation and customer responsiveness. These blocks can be applied in any organization, regardless if the industry they operate in.
Efficiency as a block of competitive advantage is based on the costs of the inputs that are required to produce a certain input. Thus firms that are more efficient are able to minimize input costs. Through efficiency, a firm is able to gain a competitive advantage that is low cost in nature. The level of efficiency can be seen from the productivity of employees. On the other hand, quality ensures that a firm creates a brand reputation which in turn translates to greater efficiency and lowered costs. An organization is able to charge a higher cost as a result of the enhanced reputation. Likewise, firms that are innovative are able to gain competitive advantage because they become unique in their operations. For example, if a company is a pioneer in its field it can charge a higher price since there is no competition, and even if new comers come in, they have to deal the reputation of the pioneer firm. When it comes to achieving customer responsiveness it is imperative that an organization meets the exact needs of the customer at any time. Thus, firms that do everything to identify and satisfy customers’ needs achieve higher competitive advantage. Customer responsiveness can be achieved through customizing goods and services, better designs and quality after-sales services.
Managers play a very strategic role in ensuring that competitive advantage is achieved. Managers provide a direct and significant contribution when it comes to sustaining competitive advantage in organizations. They do this through executing tasks, developing employees, delivering deals and promoting change (Schantz, 2009). For them to execute tasks effectively and drive competitive advantage, managers need to develop their competencies to ensure top performance. Managers need to ensure that employees are guided in terms of what is expected of them and also involved in giving suggestions on the best way to achieve goals of the organization (Schantz, 2009). Besides, balancing personal and professional growth of employees will ensure that a better competitive advantage is achieved. Therefore, managers play a critical role of implementing the day-to-day strategy of the firm. They put in place processes and systems and further create rules and procedures for operation while monitoring performance to ensure that there is maximum and efficient output.
References:
Jones, J. & George, J. (2011). Essentials of Contemporary Management. New York, NY.
McGraw-Hill/Irwin. Schantz, N. (2009). The competitive advantage that matters most. Retrieved from http://www.bettermanagement.com/library/library.
