Professional Documents
Culture Documents
Topic of Discussion: Sources of Competitive Advantage & Value Creation
Topic of Discussion: Sources of Competitive Advantage & Value Creation
SOURCES OF COMPETITIVE
ADVANTAGE
&
VALUE CREATION
Why to think for an advantage?
• Must have some advantage for
competition
• It creates more value.
• Creates more customer base.
• For the positioning in the market.
• It helps in any phase of the life cycle.
• Ultimately it results in relatively high profit.
Cost and Differentiation
Advantages
• Businesses with a cost advantage are able to
create superior customer value with products
that have average benefits and below average
cost.
• Businesses with a meaningful differentiation
advantage are able to create superior customer
value with above average benefits even at
above average prices.
• The above given type of business have different
target markets.
Third source of Advantage
• Marketing Advantage
• Businesses that can create a superior customer
value with high levels of market share and brand
awareness along with broad product lines and
highly effective distribution systems have a
market advantage.