What are the 6 factors of competitive advantage?

The competitive advantage must be sustainable in order to create long-term viability. What are the six factors of competitive advantage? The six factors of competitive advantage are quality, price, location, selection, service and speed/turnaround.

What are examples of competitive strategies?

Examples of competitive strategy

Cost leadership: Micromax smart phones and mobile phones are giving good quality products at an affordable price which contain all the features which a premium phone like Apple or Samsung offers.
Differentiation leadership: BMW offers cars which are different from other car brands.

What are the 3 basic competitive strategies?

According to Porter’s Generic Strategies model, there are three basic strategic options available to organizations for gaining competitive advantage. These are: Cost Leadership, Differentiation and Focus.

What are the three basic types of competitive advantage?

There are three different types of competitive advantages that companies can actually use. They are cost, product/service differentiation, and niche strategies.

What are the 4 competitive strategies?

4 competitive strategy are as follows:

Cost Leadership Strategy or Low-cost strategy.
Differentiation strategy.
Best-cost strategy.
Market-niche or focus strategy.

What is Nike’s competitive strategy?

Competitive strategies in “Nike” Company: Nike follows the competitive strategies of the “Product differentiation”, “Focus on market niche”, and “Strengthen customer and supplier intimacy” to improve the competitive strategies among its competitors.

Is a competitive strategy?

A competitive strategy may be defined as a long-term plan of action that a company devises towards achieving a competitive advantage over its competitors after examining the strengths and weaknesses of the latter and comparing them to its own.

Which competitive strategy is best?

A low-cost strategy works best when there is: vigorous price competition; the service is a commodity available from many vendors; it is difficult to achieve differentiation; the service application is standardized; switching cost is low; buyers have bargaining power; new entrants use low cost to build customer base.

What are examples of competitive advantages?

Examples of Competitive Advantage

Access to natural resources that are restricted from competitors.
Highly skilled labor.
A unique geographic location.
Access to new or proprietary technology. Like all assets, intangible assets.
Ability to manufacture products at the lowest cost.
Brand image recognition.

What are the 5 generic competitive strategies?

These main strategies are divided in 5 types:

Type 1: Low Cost -Strategy.
Type 2: Best Value-Strategy.
Type 3: Differentiation.
Type 4: Focus- Low Cost.
Type 5: Focus –Best value.

What is Apple’s competitive strategy?

The business strategy of Apple aims to design and develop its own OS, hardware, software applications and services uniquely which facilitates the customers with the innovative and new product solutions having unique features such as easy usage, flawless additions, and innovative designs.

What is Apple’s strategy?

Apple business strategy can be classified as product differentiation. Specifically, the multinational technology company differentiates its products and services on the basis of simple, yet attractive design and advanced functionality. First mover advantage is another element of Apple competitive advantage.

How sustainable is Apple’s competitive position in smartphone?

In terms of smart phones, Apple has a temporary to sustained advantage. One of the reason is its uniqueness and designs. The second is it has improved its battery life in iPhone 5S which lasts longer than 1 day without charging – a user can play music or take camera the whole day long.

What is Apple’s growth strategy?

In 2016, Apple stated that the company is developing new technologies to enhance existing products thus expanding the range of its product offerings through R&D, licensing of intellectual property and acquisition of third-party businesses and technology.

Does Apple have a good strategy?

Apple Inc.’s business strategy in 2020 can be summarized as providing the best customer experience with “the best products on earth”. The multinational technology company is well known for its iMac and iPhone.

What are the competitive advantages of Apple?

Apple’s competitive advantage are its control of software, Hardware, retail strategy, product differentiation and most important one is Steve Job’s strategically decision making. For the distribution system, Apple launched a website for direct sales for the first time.

How has innovation made Apple successful?

Innovation Success 360 Apple also pioneers into a new business spaces and creates new market niches. The company created game-changing innovations such as the iPod, iTunes, iPhone, and iPad. Apple innovation leaders think in terms of platforms and pipelines and relentlessly push the pace of innovation.

What are the benefits of innovation?

Advantages of innovation

improved productivity.
reduced costs.
increased competitiveness.
improved brand recognition and value.
new partnerships and relationships.
increased turnover and improved profitability.

What is innovation strategy examples?

Examples include: Dupont, Apple and Singapore Airlines. The types of technological innovation used in a proactive innovation strategy are: radical – breakthroughs that change the nature of products and services.

Why is it important to be innovative?

Innovation increases your chances to react to changes and discover new opportunities. It can also help foster competitive advantage as it allows you to build better products and services for your customers.

What are three reasons why innovation is important?

3 Reasons Innovation Is Important for Businesses

Innovation grows your business. Business growth means, ultimately, increasing your profits.
Innovation helps you stay ahead of the competition.
Innovation helps you take advantage of new technologies.

What makes innovation difficult?

The real innovation challenge is overcoming organisational resistance. Innovating is difficult because innovation is difficult. It’s not just about learning tools and methods but it touches upon a variety of emotions (innovators as well as others) and it’s embedded into experimentation, collaboration, and diversity.

What are the three innovation challenges?

The three most common innovation challenges in design thinking are people desirability, business viability and technical feasibility.

What is required for innovation?

An innovation culture requires optimistic people envisioning a bright future where people are optimistic about the solutions that are being tested. Innovative people are naturally optimistic and always bet on the idea that they can give life to a new idea rather than killing it.

How do I encourage innovation in my organization?

Seven ways to encourage innovation

Embolden the practice of intrapreneurship.
Reward innovative habits.
Offer something different.
Minimize bureaucracy and red tape.
Maintain work/life balance.
Model and promote innovative behaviors.
Create and nurture a collaborative work environment.

What are the 6 factors of competitive advantage?

What is chance in Porter’s Diamond?

Chance. The final element in the Porter Diamond model is chance. Chance refers to random events that are beyond the control of the company. For the international competitiveness, they may be very important: the discontinuities created by chance may lead to advantages for some and disadvantages for other companies.

What is Porter’s Diamond framework?

Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.

What is the diamond of national advantage?

Micheal Porter gave the diamond theory of national advantage, which states that the features of home country are crucial for the success of an organization in the international markets. It describes the factors that contribute to the success of organizations in global industries.

What is demand condition?

Demand conditions refer to the nature and size of the domestic demand for an industry’s products and services. The more sophisticated and demanding their local customers, the more pressure is created for innovation, efficiency and upgrading product quality.

What are the two conditions of demand?

Demand is the amount of a good or service that consumers are willing and able to buy. There are two conditions, the ability and the desire to buy goods. A person may want a new computer but not have the means to purchase it. The Law of Demand is an inverse relationship between price and quantity demanded.

What are knowledge conditions?

One aspect of knowledge conditions is the level of complexity of the production process. Production in some industries is more complex than production in other industries. Another aspect of knowledge conditions is the amount of new knowledge creation that is required to generate the industry’s products and services.

Does an increase in demand always lead to a rise in price?

When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged. However, when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price and vice versa.

What happens to prices when demand goes down?

As we can see on the demand graph, there is an inverse relationship between price and quantity demanded. Economists call this the Law of Demand. If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases.

What happens if demand goes up and supply goes down?

In perfect competition, the quantity demanded (demand) and the quantity supplied will be equal. If the demand increases, and the supply remains the same, there will be a shortage, and the price will increase. If the demand decreases, and the supply remains the same, there will be a surplus, and the price will go down.

Why does price rise when there is a shortage?

Therefore, shortage drives price up. If a surplus exist, price must fall in order to entice additional quantity demanded and reduce quantity supplied until the surplus is eliminated. If a shortage exists, price must rise in order to entice additional supply and reduce quantity demanded until the shortage is eliminated.

Why does supply go up when price goes up?

Price: As the price of a product rises, its supply rises because producers are more willing to manufacture the product because it’s more profitable now.

What are the forces that keep those prices from coming down?

What are the forces that keep those prices from coming down? Turns out those forces have a lot to do with this chapter’s topic: demand and supply.

Why is supply upward sloping?

Firms need to sell their extra output at a higher price so that they can pay the higher marginal cost of production. The supply curve slopes upward, reflecting the higher price needed to cover the higher marginal cost of production.

Why do we want to maximize the total surplus?

In competitive markets, only the most efficient producers will be able to produce a product for less than the market price. Hence, only those sellers will produce a product. Hence, total surplus is maximized at the market equilibrium price. This is why competitive, free markets allocate resources most efficiently.

How do you maximize total surplus in a monopoly?

The social planner could maximize total surplus by charging the price corre- sponding to the point of intersection between demand and marginal cost curves. To find the welfare effects of monopoly, compare the maximized total surplus with the total surplus when the firm is run by a profit-maximizing owner.

What is the concept of consumer surplus?

Definition: Consumer surplus is defined as the difference between the consumers’ willingness to pay for a commodity and the actual price paid by them, or the equilibrium price. It is positive when what the consumer is willing to pay for the commodity is greater than the actual price.

What is the formula of consumer surplus?

While taking into consideration the demand and supply curvesDemand CurveThe demand curve is a line graph utilized in economics, that shows how many units of a good or service will be purchased at various prices, the formula for consumer surplus is CS = ½ (base) (height).

What is consumer surplus with diagram?

Consumer Surplus is the difference between the price that consumers pay and the price that they are willing to pay. On a supply and demand curve, it is the area between the equilibrium price and the demand curve. For example, if you would pay 76p for a cup of tea, but can buy it for 50p – your consumer surplus is 26p.

Where is consumer surplus?

Consumer surplus is defined by the area below the demand curve, above the price, and left of the quantity bought. Graph 3 combines producer surplus and consumer surplus into one graph.

How do you solve consumer surplus problems?

The consumer surplus formula is based on an economic theory of marginal utility….Extended Consumer Surplus Formula

Qd = Quantity demanded at equilibrium, where demand and supply are equal.
ΔP = Pmax – Pd.
Pmax = Price the buyer is willing to pay.
Pd = Price at equilibrium, where demand and supply are equal.