Creating strategic competitive advantage in the process, functional strategy, business strategy, operational strategy or corporate strategies
To survive and thrive, an organization must create a competitive advantage. A competitive advantage is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage. In turn, organizations must develop a strategy based on a new competitive advantage.
The L’Oreal Group, which is headquartered in Paris, is the world's largest cosmetics and Beauty Company. The company majorly works in the cosmetics business and personal grooming products as hair color, sun protection, perfume fragrances and other skin care products. Its wide range of products span over the dermatological as well as pharmaceutical fields. L’Oreal is also technology advanced and the R&D department has numerous nanotechnology patents in the United States.
Porter (1980) created a model which considers five important forces (Porters five forces) which aims to establish a profitable and sustainable position against the forces that determine industry competition, therefore position themselves within it and differentiating themselves where necessary in order to strategically gain a competitive advantage - this model gives vision of: Threat of new entrants, Threat of substitute products or services, Bargaining power of customers , Bargaining power of suppliers and Intensity of competitive rivalry (Porter 1980). Using models and academic theory like this allows strategy to be formed through a rational and an analytical process. Chandlers (1962) cited in (Lomash 2003) suggests the analytical process is about the determination of long-term clear goals, adopting actions to achieve these goals and then building the resources within the organization around this strategy in order to ensure it succeeds. Johnson (2005), likewise, simply suggested a three step approach to strategy - analysis, choice and implementation which goes hand-in-hand with intended strategy.
If a company wants to be successfull in their business it has to be able to create competitive advantage over it competitor in a same business area. (De Wit & Meyer, 2010). What approach or strategy should the company take into account in order to create competitive advantage in their business environment is the core issue for the managers.
As a global healthcare organization, our goal has always been to promote quality of care and optimal health to people around the world. We have a firm commitment to serve diverse communities with products and services that reflect the latest trends in innovation and the highest quality at reasonable prices to match consumer expectations and needs. We have established a culture founded on individual accountability that expects employees at all levels us to communicate openly and transparently; any strategic, operational, or financial challenges we face are viewed through a comprehensive moral
Our primary goal is to provide the necessary products and services to ensure health care providers are able to provide the highest level of care for their patients. By striving to find quality products, we are able to work closely with our clients to provide the best services. We specialize
Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both.
Competitive advantage is the point of power for any organization as it is the point from which an organization can maximize it's profits if it's been planned for it well .
Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).
A company or an organization can create competitive advantage only when it is able to distinguish itself from the rivals by implementing value creating strategy over a longer period of time. It is said to have sustainable competitive advantage when other rival firms are unable to duplicate the value creating strategy of firm which has led to achievement of
“Competitive Advantage introduces the concept of the value chain, a general Framework for thinking strategically about the activities involved in any business and assessing their relative cost and role in differentiation”. Michael Porter, (1985).