How to Manage for a Competitive Advantage
A competitive advantage is a unique selling point that a firm has over other businesses. Having a competitive advantage is essential for any business that wants to compete for the business of consumers. It is therefore necessary to manage for a competitive advantage. Although it can be difficult to manage for a competitive advantage, it is relatively straightforward when following a basic set of steps.
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Instructions
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Decide on the type of competitive advantage that you want to achieve. There are two types of competitive advantage, price advantage (when a business offers the lowest prices) and differentiation (when a company offers a unique product).
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Identify the resources that are necessary for the type of competitive advantage that you have selected. For example, resources necessary for a differentiation advantage might include superior design and marketing skills.
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Gather the resources that you have identified. This can be done by creating the resources within the firm, for example, by hiring the people you need or researching the information you need internally. It can also be attained by acquiring external resources, such as by acquiring a firm that already possesses the necessary resources.
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Manage the firm's resources to obtain a competitive advantage. This involves adding any additional resources that are necessary and, in some cases, dropping some resources that are no longer needed.
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Regularly review the firm and assess the competitive advantage. If necessary, make changes to the firm's resources to maintain a competitive advantage.
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Tips & Warnings
Remember that resources can include physical, capital and human resources. These resource types can all be extremely important to obtaining a competitive advantage.
If you are not familiar with strategic management, it is advisable to seek the assistance of a management consulting firm that can help you develop a competitive advantage.
