Management
Management
Competitive advantage refers to the advantage a firm has over its competitor. In service industry, competitive industry arises when a firm provides unique services to its customers more than the competition. On the other hand, competitive advantage in manufacturing occurs when a firm possesses efficient production systems that produce unique products that competitors cannot easily copy. Regardless of whether it is in the service or manufacturing industry, competitive advantage involves the presence of unique features that attract more sales and customers than competition. However, the most conspicuous difference between competitive advantage in service industry and competitive advantage in manufacturing industry is in the point of focus. Competitive advantage in service industry mainly focuses on skills whereas it focuses on business processes in manufacturing.
As the CEO of an organization, I would rely on Kotter’s advice for dealing with complacency. First of all, I would share external experiences with employees so that they can be aware of the threats that the business is facing. The approach will motivate employees to appreciate the opportunities that the organization can exploit to achieve competitive advantage. Secondly, I would always remain alert agile and alert to ensure that employees promote a culture of urgency. Thirdly, I would look for opportunities during crises by viewing crises as opportunities for the organization to prepare for future opportunities. Finally, I would eliminate urgency killers to ensure that the organization pursues a sense of urgency with little distraction.
During the introductory stage, a manager may offer misleading information with regards to their products to induce purchases from consumers. Additionally, a manager may engage in destructive advertising to tarnish the image of incumbent companies. The reason is to scare consumers from using the products of competitors so that they can demand the manager’s products. Finally, a manager may offer low-quality products in an attempt to minimize the costs of production.
Joint venture refers to a business arrangement whereby companies merge resources to pursue a common business goal. An example of a successful joint venture is the alliance between Volvo and Eicher because they conquered emerging markets. The success of the joint venture presents the leadership lesson that global leadership in technology, quality, safety and environmental care are key success factor in joint ventures. An example of a failed joint venture is the alliance between Chrysler and Daimler AG. The failure of the alliance reveals that conflicts of interest make it difficult for a joint venture to prosper.
Companies fail because of cultural differences. Culture impacts the way people do business thus it is almost impossible to work with a new culture. The other reason is that countries have different consumer demographics thus it is difficult the needs of foreign consumers. As a strategist, I would use foreign partners to handle business in the new country to avoid hostility.
Competitive advantage in service industries is different from that of manufacturing industries because these two industries deal with unique products. Managers should appreciate that skills are the center of competitive advantage in service industry whereas as business processes are the center of competitive advantage in manufacturing industry. The business environment is very competitive thus the best approach to sustaining a competitive advantage is through a sense of urgency. An organization should always be prepared to exploit opportunities that will make it more competitive that its peers.
References
Hill, C. W. L., & Jones, G. R. (2012). Strategic Management. New York: Cengage Learning.
