Competitive Advantages of an Organization

Posted: September 3rd, 2013

Competitive Advantages of an Organization












Competitive Advantages of an Organization

 Competitive advantage is a fundamental aspect for any firm or organization in the current global economy. The current market is filled with numerous organizations that endeavor in finding ways and strategies that can haul them in front of their competitors (Great Britain, 2004). Therefore, they attempt to offer their customers services and experiences their other competitors cannot. If an organization is able to sustain profits exceeding the considerable average in its respective market, it is deemed to have a competitive advantage over its competitors. An organization’s competitive advantage will be in existence if it succeeds in delivering benefits similar to its rivals at lower prices, or offer exceeding benefits on the same product or service compared to its competitors. Therefore, a competitive advantage is a way of enabling an organization to create superior values for its customers as well as superior profits compared to its customers (Great Britain, 2004).

The first competitive advantage many organizations attempt to employ revolves around the prices of their goods or services. Numerous firms and organizations attempt to compete with each other through researching for ways that can significantly lower their operating costs (Grubbström, 2002). Consequently, when operating expenses are minimized, that translates to low prices for the respective goods or services. In today’s capitalistic economy, the price of a product is a common competitive advantage (Grubbström, 2004). This is because consumers will always look to purchase something at the lowest price available. However, this maneuver is increasingly raising concerns with consumers becoming aware of issues related with low prices. The reason behind this is because many consumers usually associate low price with poor quality. Therefore, to eliminate this school of thought, organizations will often accompany their products with support stances such as assurances and warranties.

The second competitive advantage organizations normally use to cement their authority in the market lies behind advertisement. Majority of organizations rest their reliance advertisement measures aimed at boosting product and service sales, building valid relations with their customers and to enhance strong competition against its competition. Competition is increasingly becoming a day-to-day endeavor that can range from subtle strategies such as mouth to mouth to expensive media campaigns. Advertising is becoming increasingly important as a result of its success and is being backed by unique and creative campaigns measures. The main idea behind an advertisement campaign lies behind drawing attention from the intended audience to the particular product or service (Grubbström, 2002). This makes Potential consumers aware of the service or product that can suit their interests and give reason to invest in it. In addition, existing consumers are kept to date by the latest products available and is a way of keeping them attached to the product.

In addition, advertisements give organizations the opportunity of building on their brand as well as a reputable identity over their competitors. Apple brand is a good example of a successful advertisement strategy. The organization possesses distinct advertisements in both print and television form. Both forms can be easily and instantly recognized as the organization’s own through its seemingly clean identity reputable and modern brand. To be successful, organizations relate their advertisements to current trends and individually sell the company’s product and the organization as a whole. If the advertisement strategy manages to achieve both goals, the result is a good relationship between the organization and the consumer. Establishing a good relationship with the consumer will grant the organization with a competitive advantage over its rivals (Grubbström, 2002).

The third competitive advantage organizations are currently implementing is through global marketing strategies. Global marketing involves marketing products on a worldwide scale taking or reconciling commercial advantage of the differences in world wide operations, opportunities and similarities. Competition on a global front has been on an increasing intensity and therefore a challenge to organizations and companies that still operate in their domestic market (Haugen, 2010). The market for products is increasingly opening up and becoming more integrated accelerating the pace of change. Advancement in technology has opened up new ways of minimizing the scale advantage of established firms and therefore new competitors are emerging through globalization as pressure mounts on organizations as they try to rival each other (Haugen, 2010). In addition, organizations from countries such as China, India, Brazil and Malaysia are gradually expanding as their domestic markets are reverting global positions to be able to compete with other counterparts in the industry. This in turn stimulates more awareness on the opportunities in the international market and need to compete internationally. Many organizations that previously focused on domestic markets are venturing into other countries bringing forth new sources of competition (Haugen, 2010). Not only is competition growing among all organizations, but the mode of competing is changing as well. Nevertheless, to succeed in global competition, an organization is required to carry out adequate research, gather the necessary knowledge before deploying its strategy.

Finally, the fourth competitive advantage visible in the competitive endeavors from organizations is witnessed through the quality of an organization’s products. In general, the assumption is that improvements in the product’s quality are a fundamental tool that can enable the organization to achieve sustainable competitive advantage over its rivals, and for the long period (Garvin, 2002). Results obtained from product improvements are dependent on, take for example, the reaction of the organization’s competitors. The management of the organization will get a different result from the intended one if the competitors react in an intense and swift manner. An empirical study carried out in Netherlands concluded that the typical reaction of an organization’s competitors is in real sense, is quite a fast reaction. The intensity and rate of reaction is a greater scale lower in diminishing markets as compared that in growing and established markets (Garvin, 2002).

Service quality and reliability improvement aspects are deemed important strategies when an organization is engaging in quality competition. However, it is difficult to employ swift imitations of product and service quality improvements. If the quality is based on other aspects other than products and services, say conformance to performance and other standards, then this does not qualify as real competitive advantage. If these quality improvements are orchestrated in competitive manner perceived to be “traditional”, the reaction is then quite simple to imitate. This kind of competitive advantage need not be as long term compared to others such as brand building and advertising, but it is a good way for an organization to keep up with the rest of its rivals (Garvin, 2002).

An organization has to make adequate research and identify the opportunities that can enable it to have a competitive advantage over its rivals. The current market is swarming with numerous organizations and companies that strive to find ways and strategies that can put them in front of their competitors. When identified, the competitive advantage of an organization should be focused on in order to guarantee market survival and success.



Garvin, D. A. (2002). Managing quality: The strategic and competitive edge. New York: Free Press.

Great Britain. (2004). Creating competetive advantage through innovation: A guide for corporates and business organisations. London: DTI.

Grubbström, R. W., & Hinterhuber, H. H. (2002). Product pricing and costing. Amsterdam: Elsevier.

Haugen, D. M., & Mach, R. (2010). Globalization. Detroit: Greenhaven Press.

Lee, C.-K., & Tsai, T.-H. (January 01, 2004). Demand-responsive pricing method for the product line of Taiwan high-speed rail. Transportation Research Record, 1863, 1-8.


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