Competitive Advantage theory Essay

The last decades there is a brand new term going around in the world of business. Its name is Competitive Advantage. As various extremely important executives claim this factor can be the missing key, which will lead eventually a company to success. Allow me to give a first description of what I have understood, so far, of the competitive advantage term. According to what I have read and heard in lectures of the course Business Economics, I consider the C. A. to be the difference a company has from the rest of the market, which will help her to obtain not only higher profits but also longevity. As Michael Porter in his 1985 text says that, it is about the distinct and ideally sustainable edge over the competitors. The competitive advantage is said to be based on monopoly profits and on/or the Ricardian Rents and is used to generate another important factor, the added value. The writer – expert in finance John Kay implies that the C. A. presents no stability and it is always relative for each one of the companies in all the markets of the world. It is also something measurable enough in order the executives to extract useful conclusions and plan the company strategies. The relevant benchmark is the marginal firm in the industry. The company with the least potentials and the smallest market power is used as the baseline against which the competitive advantage of all other firms can be set. Methods of building a Competitive Advantage A general but for most people questionable claim would be that all the existing firms in a market are able to create a competitive advantage. That on theoretical basis is correct. Significant economists have worked for ears in a row towards this goal and have elaborated strategies and methods a firm can use in order to obtain the competitive advantage. The Resource Based View of the Firm The Resource Based View of the Firm has its origins in four different significant experts of finance: Edith Penrose (1959), Birger Wernerfelt (1984), Jay Barney (1991) and last but the most important writer Margaret Peteraf (1993). M. Peteraf put together the existent elements of the work of the previous three writers and produced the well-known > in her article reprinted in Foss. The main idea of the above-mentioned methods is that all of them give considerable importance on the resources, those that a company already possesses or the ones it procures from the outside environment. These resources must exhibit a special characteristic in order that C. A. to be produced. That is the so-called Resource Heterogeneity, meaning that they need to be rare so as not the competitors to use them and valuable in order to increase the firms efficiency and effectiveness. For example rarity could a minor of diamonds have and valuable could software program of a computer company be. The Recourse Heterogeneity can be obtained through either Product Differentiation or Cost Advantages. As far the product is concerned when a company differ one of its products it instantly creates a heterogeneous resource and approaches the C. A. (as per Peteraf 1993). Then it can offer those products in the whole market or in some market segments. The differentiation can be on the quality and the market segments can be large, small or of special interest. The market selection must be done with extra care and attention. The firm is in position to choose either to offer its products following the Broad Coverage Strategies e. g. unisex cosmetics and obtain Economies of Scale or produce for a specific market e. g. anti – ageing serum for the athletes of running. At this point, it needs to be mentioned that the consumer preferences and the competitor products must be taken into seriously account. As far as the Cost Advantage is regarding a firm can benefit by the lower costs. That means that the quality must be lower in order the cost of the firm to stay on low levels or to benefit by the superior technology. Besanko in his work implies that a firm can benefit from both Cost and Benefit Advantages if and only if increased demand and output can be translated into economies of scale. Strategies of sustaining a competitive advantage The real difficulty, according the opinion of the experts of finance is not only creating an advantage over your competitors but also maintaining your economic outcome through time. The enormous effort in order to have that precious gap between your company and your rivals keep exist. There is a variety of threats in the long term like the easy entry of the companies that have depicted a chance for making profit, the perfect information the competitors can posses and the most important the access to the companies resources which means that profits are in danger. A good number of these threats are common to all markets no matter the size, the special interest or the type, even in monopoly or oligopoly, according the economist-writer Besanko, and greater becomes the more competitive the specific market gets. At this point, the well- known Resource Based View of the Firm and the Product Differentiation Strategies come to the rescue of the company’s competitive advantage. As it is clearly written in a good number of economic texts, firms can earn excess profits if and only if they have superior resources protected by some form of isolating mechanism like a kind of a patent. These resources in question must exhibit some characteristics such as to be valuable in order to increase the firms efficiency and effectiveness and rare so as not to be acquired by the competitors. In addition to the previous, they have to be imperfectly imitable plus not substitutable by resources easy to be found and imitable. The serious problem is that this type of resources is hard to find and use in the production process. The alternative strategy a company can follow in order to maintain its competitive advantage is the product itself. More specific, the constant change of an existing product in the market, called product innovation. In some firms, the rate of this attempt is highly rapid. As the economist Schumpeter argues, that is because the isolating mechanisms cannot be permanent as the new technologies arise and the tastes change or the government policy evolves. A logical consequence could be that the life of the product becomes shorter and the competitors obtain to imitate an outmoded product at the end. The continuous product innovation can be a solution but not in a permanent way for it can be relatively costly and inefficient. More, the firm must process to the Creative Destruction, in other words to destroy the existing resources of the advantage so that the rivals not to benefit by them. Margaret Peteraf , one more time, in her 1993 article argues that the solution to the above problem is included in The Four Basic Building Blocks to creating and sustaining competitive advantage. According to her text, there are four corner stones, which lead a firm to sustain its competitive advantage. In the first place is the already mentioned and quite analyzed Heterogeneity of the resources, secondly comes the term imperfect mobility, meaning that the resources that create value cannot be bought on the open market and if they do so not to function perfectly. Some examples can be the firm’s reputation, a highly experienced scientist, a special machine with a number of peripherals est. In the third and forth place there are the limits to competition. The economist Rumelt describe the limits as the forces which limit extends to the point an advantage can either be duplicated or neutralized. There are two types of isolating mechanisms, the early mover advantages and the impediments to imitation. The first one with its tools like the learning curve e. g. the scientific knowledge in the firm, the reputation and buyer uncertainty e. g. he willing to buy a very expensive wristwatch or a design outfit, the switching costs e. g. not to use the petroleum moving cars anymore and switch to the solar power ones and the network effects e. g. the hair – dryer device. The second one includes the barriers a company puts between its product and the rest of the group such as legal restrictions e. g. copyrights on the product or on the resource or on the distribution channel. The Relationship between the Competitive Advantage and the Banking – Finance sector. For the most part, the firms in the globe seek to find and maintain their competitive advantage in almost any cost. Among them are naturally the firms of the banking and finance sector. There is a plain but important difference between the firms that produce products and those producing services. The second group needs to put much more effort as regards the resources. On the one hand these firms offer a great variety of product services to their customers, from different loans and a great number of credit cards to services all over the world. On the other hand they try to benefit from the low cost prices and to use the knowledge they posses to their best.

Kudler Foods †Expanding their Business towards Catering

Kudler Fine Foods is a rapidly expanding public alimentation business in California. They organize their activity within three retail stores: the first in La Jolla, the second in Del Mar and the third one in Encinitas. Kudler products are mostly fine products, and the customers are being provided with numerous delicatessens. The net advantage that separates Kudler from other competitors is represented by the relatively low prices. Kudler’s policy is to insure the best quality of their products at affordable costs. After having registered impressive success on the market, Kudler is now considering launching into the catering business as well. This means that the producer would have to acquire additional space, employ certified chefs and distribute the food to several social events. Investing in such a business opportunity implies a multitude of risks. Therefore, prior to starting a catering business, marketing specialists need to analyze the market and develop a plan for the business. The Marketing Mix The marketing mix is a combination of four crucial elements, also known as the 4Ps: product, place, price and promotion. In order to insure the success of its strategy, the manager at Kudler Fine Foods needs to base his decisions on the effects that these four elements generate upon the targeted market. The Product The catering product offered by Kudler is a complex one as it is both a product as well as it is   service. The product is represented by the actual food presented to the customer and the services are the making of the food and its delivery to the address requested by the customer. Regarding the product, the manager has to make several decisions, such as: brand name, functionality, styling, safety, quality, packaging, warranty, accessories and services. (NetMBA, Business Knowledge Center). The Kudler catering products are mostly designed for two occasions: social events and lunch meals for employees. The main characteristics of both types of products are similar, in the meaning that they are meant to appease one's hunger. However, in the case of employee lunch, the foods would have a simple consistence whereas in the case of social events, the order would be more sophisticated,   consisting of numerous delicatessens, rare appetizers and desserts. The catering products would be distributed under the name and exclusive approval of Kudler Fine Foods Inc. The quality of the products would be in perfect accordance with the rename gained so far by Kudler: high and irreproachable quality. The packaging of the food would be Kudler's responsibility and they would contract a company specialized in manufacturing packages. These could be personalized for each occasion and they would definitely have written on them the the caterer's name and contact details. The warranty of alimentation products is a sensitive issue within caterers and their clients. Considering that the products are prone to rapidly deteriorate if kept in inappropriate conditions, the supplier has the moral and legal obligation to inform the customer of the conditions in which to properly preserve the food. If the customer respects the supplier's indications and the food still goes bad, the caterer will either replace it, either return the customer their money. Finally, the accessories and services provided by Kudler could include additional spice, pickles and drinks, dishes and table linens or trained personnel to wait on the quests. The additional charge for these accessories and services would be pre approved by both customer and caterer. The price of the products When it comes to determining the price of the catering products, the manager needs to decide upon several issues, among which are: pricing strategy, suggested retail price, establishing the volume of discounts and wholesale pricing, cash and early payment discounts, seasonal pricing or price flexibility (NetMBA, Business Knowledge Center). In order for Kudler Catering to benefit of a successful launch and gain as many customers as possible, they should implement pricing with 5% lower from the prices promoted by their competitors. Such a strategy would not raise significant difficulties for Kudler as the community already acknowledges them as a provider of high quality products at decent cost. Therefore, the catering products would easily offer customers an effective report qualityprice. Even if the prices are to be lower than those promoted by competitors, they should be established based on the company's costs. In this order of ideas, the price of the products would enable the producer to financially remunerate their staff, pay all fiscal obligations towards the state, repay the supply debts, grant the ability for further material purchase and insure a significant profit. For a successful promotion of the products, Kudler would also grant their customer several discounts. The usual remuneration method would consist of an advance of 25 to 50%, and a further payment upon the delivery. However, if the customer is willing to allocate the supplier the entire amount of money instead of just the advance, the caterer would grant them a 5 to 10% discount (depending on the amount of the ordered products). Place Placing the products implies finding appropriate means and channels for successfully distributing them. The Kudler Fine Foods manager has to decide upon the following problems: distribution channels, market coverage, specific channel members, inventory management, warehousing, distribution centers, order processing and transportation (NetMBA, Business Knowledge Center). The catering products would be manufactured and initially stored within Kudler's space. An hour prior to the event for which the products were ordered, the caterer would have them transported to the customer where they would be prepared for the guests. The order processing and transportation would be entirely the responsibility of the producer. Promotion Promoting the catering products on the market implies a constant communication with the target audience and the means of getting their attention and generating a positive attitude towards the products. Among the issues regarding promotion are: promotional strategy, advertising, personal selling and sales force, public relations and publicity (NetMBA, Business Knowledge Center). Kudler would use most of the available media channels for promoting their new business. They could contract an advertising company to be in charge of their promotional campaign. They could develop commercial advertisements that could be seen on television or radio announcements. Also, they could order spreading out fliers and organize sampling sessions. Aside from the advertising campaign, the producer would establish a 24 hour PR department in charge of receiving telephone calls from customers. Kudler employees would register all requests and complaints from clients and forward them to their colleagues and superiors. Target market and technology The Kudler catering target market is composed of two categories: organizers of social events and company managers who wish to order the products for their employees' lunch. The second category is a less pretentious one and does not require highly specialized production technology. On the other hand, catering for social events demands hi-tech gadgets and a high quality of the foods served. In order to successfully cater social events, Kudler needs to posses several hi-tech devices such as highly specialized kitchen and industrial robots. Not only do these machines improve the overall quality of the final products, but they also save a significant amount of time and energy for the producer. Kudler catering and organic growers For several years now, the usage of organic growers in cultivating agricultural products has been a widely disputed issue around the globe. Supporters of organic growers argue that the quality of the resulted vegetables is significantly better than the quality of the vegetables grew in the classical method. Moreover, they state that the organically grew vegetables have better chances of developing in unfriendly weather and soil conditions. They say that â€Å"organic crops perform up to 100 percent better in drought and flood years† (The New Farm Research). On the other hand, disclaimers of the artificial soil fatteners argue that organically grew vegetables generate negative effects upon the consumer's health. They believe that long term exposure to organic growers could lead to incurable diseases and even death. Given the multitude of arguments in favor and against organic growers, the reactions of Kudler's customers would be diverse: some would agree, some would disagree and some would be indifferent. In order to satisfy their clientà ¨le, the catering company could discuss this issue with the order deponent and allow them the choice of the kinds of products and vegetables to be used for their event. Conclusions Kudler Fine Foods is a company that has, in a relatively short time, gained the trust and respect of customers. With their three stores opened in California, they proved their commitment and understanding towards the clients' needs by presenting them with high quality products at decent prices. Today, Kudler is considering launching their company onto the catering market. By maintaining their effective report of price and quality, aided by their acknowledged reputation and the support of a well trained marketing team, Kudler is prone to register successful outcomes. Bibliography: ? NetMBA, Business Knowledge Center, Marketing Mix, 2002 – 2006 http://www.netmba.com/marketing/mix/, last accessed on October 7, 2006 ? The New Farm Research,  Ã‚   Organic crops perform up to 100 percent better in drought and flood years, posted on November 7, 2003 http://www.newfarm.org/depts/NFfield_trials/1103/droughtresearch.shtml, last accessed on October 7, 2006 ? Varsity Essays, Kudler Fine Foods Proposal, 2006 http://www.varsityessays.com/essays/63026.html, last accessed on October 7, 2006                                    

Strategic management Essay Example | Topics and Well Written Essays - 4000 words

Strategic management - Essay Example This paper focuses upon the strategic planning as an analytical process for organizing the present on the basis of desired future projection. So, it is a transparent road map which is used to lead an organization from its current position to the near future i.e. in next five or ten years where it would like to be. It is very necessary for all division in an organization to have their own strategic plan. There are some important characteristics in a strategic pan. It should be simple to be understandable for the persons or employees who will implement this. It needs to be clearly written based on the current actual situation of an organization. A strategic plan should have enough time allowed for settling down the objectives and adopting new strategies. It should not be rushed to implement a strategic plan. The main purpose of strategic planning is to structure the long term goal of an organization to assist the associates involved with the organization in developing priorities and ef fective serve for sustainable outcomes. The plan must be practical as well as flexible so that it can be used as effective guide for implementing programs. Evaluating the outcomes and making necessary adjustments in the process. Another of purpose of strategic planning is to improve probable chances of desirable and possible outcomes. There are important values of planning which integrate the performance of an organization. It helps to prepare the contingencies which can prevent an organization from unable of attaining goals.... There are important values of planning which integrate the performance of an organization. It helps to prepare the contingencies which can prevent an organization from unable of attaining goals. Planning enables an organization to develop a framework for estimated growth and progress. An effective strategic plan influence the organization to adopt an efficient strategy for proper allocation of resources in particular manner will allow enable it to achieve its goal (Thorton, 1986, p.5). B. Overview of the strategic planning process An organization is benefited by strategic planning to have an effective focus on attention and resources in the away to goal. The strategies help the organization for progress and growth by successful implementation in the macroeconomic level i.e. in the volatile global and national business environment. An organization can develop effective budget, gain efficient collaboration and cooperation inside and outside the industry of the organization. It helps th e organization to focus on the important work for a particular timeline. Another function of planning process is that the processes develop a framework of estimation of work need to be done with respect to deadline i.e. what need to be done and when. By this process the leader of a division can track the process so that he can monitor the growth of the process and take essential actions related to the strategies as well as activities in the programs. The macroeconomic business environment fluctuates all the time, even a smallest changes in the micro level i.e. in the industry where the company belongs, can ruin a best strategic plan. If a continuous monitoring is done in the strategic planning process, it will help the leader as well as the organization to evaluate the progress rate

Personal mission statement Essay Example | Topics and Well Written Essays - 1000 words

Personal mission statement - Essay Example Leibowitz (1997) claims that reflections, complex thinking and communication helps the students to be able to align their goal to their career. During my last semester, I performed poorly in two units (Ancient History and Political Science) and this made me a have a low grade overall. Personally, my goal for this semester was to improve on my grade in these two units I did not perform well in order for me to increase my GPA and graduate with a good grade. During the beginning of semester, there are a number of personal and academic goals that I have been looking to accomplish. There are some goals that I have accomplished and some that I have not. Therefore, reflection on one’s goals is important as it helps one to know where he has come from and where he is going. I chose to improve on these subjects as it has greatly affected my chances of making it to the Dean’s list. My academic goal for this semester was to make it the Dean’s list and I could only achieve this through improving in my performance on the two units. With hard work and discipline, I am proud to have achieved this goal. I was able to plan a timetable that was very demanding and stack to it to the latter. My timetable required me to organize and motivate myself to complete all my assignments on time so that I would create more time for the two units. At the beginning of the semester, I made a list of the course assignments, jotted down the key points and with the help of my calendar I was able to plan my day and week respectively. On the weekdays, I allocated my designated study time table for 9pm to 11 pm. Nonetheless, I was forced to push the back this study period to accommodate time for my friends which conflicted with my set goals. Over the semester, I believe that I have accomplished most of my goals while other goals have been changed to accommodate others. I was able to communicate more with classmate that I never used to talk to. By making new friends, I was able to

Virgin Atlantic A Premium Brand Assignment Example | Topics and Well Written Essays - 2000 words

Virgin Atlantic A Premium Brand - Assignment Example The airline industry is one of the fastest growing industries in the world. The airline industry is playing a major role towards the growth of the world economy and also helping to increase tourism activities. The concept of high quality and money worthy airline was introduced in 1984. Virgin Atlantic is world’s first luxurious airline established by the founder of Virgin Group, Richard Branson. Virgin Atlantic is headquartered in West Sussex, UK. Nowadays the company is operating globally. For example, Virgin Atlantic provides airline service in countries such as Australia, Caribbean, China, Hong Kong, India, Japan, Nigeria, South Africa, Dubai, and the USA. At present Virgin Atlantic Airways has a fleet of ten Airbus A330-300s, Four Airbus A340 aircraft, and five Boeings 747. They already have ordered six Airbus A380 aircraft which will be in operation from the year 2015. The company also operates with cargo flights in some countries of the world. Apart from that, the compan y has also entered the hospitality industry in 1984 and launched Virgin Holidays. Virgin Holidays tour and traveling venture that operates in the new Virgin Atlantic routes such as Orlando, Miami etc. Some of the major competitors of Virgin Atlantic are British Airways, Air France, and the Fly Emirates. Presently, the employee strength of Virgin Atlantic is around 9000 worldwide. Last financial year Virgin Atlantic earned  £46.8m revenue while their annual turnover is around  £2m. Virgin Atlantic is acknowledged globally for its excellence in services to the customers and the unique promotional strategy. Through this report, the competitive strategies and core competencies of Virgin Atlantic airline will be uncovered.

Is gender equality achievable in a Muslim society Research Paper

Is gender equality achievable in a Muslim society - Research Paper Example Since the pre-modern era, Muslim society has maintained a strong stand regarding gender-based issues that seemed to bring confusion in the community (Razack 23). This entailed specifying clearly diverse rights encompassing both genders coupled with certain areas and rituals where they best applied. Islam mainly draws its guidance from Qur’an whose teachings normally regard men and women as equal before God and no one is a derivative of the other (Keshavjee 113). However, during prayers, the worship doctrines disregard the service of a woman being an Imam. For the past 150 years, Muslim society has undergone tremendous changes fueled by the emergence of modernity in their states. Moreover, the western culture, like other global communities, has influenced Muslim society towards esteeming of women to the extent of allowing them into the political arena (Fadel). For instance, within the 150-year span, Muslim women have shown excellence in politics and other varied areas like educ ation where some of them are prominent scholars. This is evident in states like Pakistan where Benazir Bhutto held a post of prime minister. These manifestations backed by some religion liberties foresee the achievable gender equality in Muslim society. Islam is particularly amusing in the context how it defines gender equality. For instance, contrary to other societies, at certain incidences women have the privilege of inheritance when even the most influential people do not encompass any mandate to question (Abdullah). This is evident in the case of the husband’s demise or when the father willingly offers to give inheritance. Muslim society defines gender equality in diverse contexts that encompass ritual, family and public. In the family with the man being the head, a woman is liable for the family’s upbringing in the absence of the husband when she becomes the one in charge (Keshavjee 109). Other contexts, except religious services, do not hold strict guidelines wh ich pave more way for women to exercise diverse privileges that will uplift equality. Globally, women activists, especially the political figures, continue to exact pressure regarding Muslim female gender recognition (Abdullah). This aspect acts a motivation to the upcoming female generation who will be vibrant in ensuring that their presence and dignity receive necessary esteem. Hence, they contribute to gender equality even in the most cultured states that currently fail to accept feminine political leadership. Contrary to the pre-modern theologians, who advocated against women holding certain posts in the society, the current situation has changed (Keshavjee 112). Numerous states have permitted women to venture in the political arena where, according to their excellence, they can assume varied posts at which their competence can allow them serve best. This is evident in states like Pakistan, Turkey and Bangladesh (Feryal). Modern religion theologians are not anti-female concernin g their serving in elevated posts so long they observe norms of modesty. Education has also contributed immensely to the emancipation of females from the strict cultures of various states, especially those that entail extremism and enhancement of gender equality (Abdullah). This has offered a woman an upper hand and revolutionized her against certain weird practices, for instance, public canning of women lawbreakers. The action emanates from modern theology that offers room to women since some are becoming independent due to education status, thus, some becoming scholars (Keshavjee 110). This renders them being cosmopolitans and encountering west modernity that continues revolutionizing women further (Feryal). For illustration, an English-speaking Muslim does not apply family law that the Middle East states advocate and emphasize. This depicts a revolutionized society that has disregarded some practices that degrade women and adopt those which will try to enhance equality due to ove rwhelming family

BUS303 MODULE 2 LP Essay Example | Topics and Well Written Essays - 500 words

BUS303 MODULE 2 LP - Essay Example I actually commend the University for according students with the opportunity to make partial payments through accomplishing a Promissory Note form, which is to be secured from the Dean’s office prior to major examinations. Since my financial sources were not enough, I secured the form and lined up at the Cashier to make a partial payment. After about 30 minutes of queuing, the system experienced technical difficulties and those in line were told to either wait, try to pay through an authorized bank, or return the next day. The follow day, I directly went to the cashier; and true to her word, accepted my partial payment. I proceeded to the registrar to validate the payment and secure my examination permit, only to be told that the Promissory Note (PN) needed to be signed first at the Dean’s office. When I went to the Dean’s office, the line of students securing the signature on their respective PNs was longer than the eyes could see. After a patient wait and when one’s turn was due, the authorized signatory informed me that I needed to pay an additional $xxx amount; otherwise, I would not be given an exam permit despite the amount that I already paid. I had to go back to the Cashier, have the PN signed, return to the registrar and finally secure the exam permit. It would have been so much easier to have communicated all the payment protocols during orientation; or to have a flowchart of procedures posted near the Cashier and Accounting Offices. I hereby enjoin University personnel in charge of creating policies and procedures to publish payment protocols and avoid students queuing and being referred back to departments to secure signatures or make additional payments, which are fairly easy to comply with explicitly disseminated guidelines. This would likewise facilitate payment and collection and avoid unnecessary returns. Hoping for your immediate action in this regard. In writing the persuasive memo, the guidelines in writing persuasive