...The Competitive Advantage of Heinz Company over Competitors Student Name Institutional Affiliation The Competitive Advantage of Heinz Company over Competitors Heinz Company is the most global of all the American based food companies. It is famous for its iconic brands that it markets in six continents. The company offers nutritious, convenient, and delicious food for families across 200 nations in the world. In more than 50 of these countries, Heinz Company enjoys the market leadership position. Heinz Company was founded in 1869, which is an indication that it has long historical roots and a wealth of knowledge in the industry (Heinz, n.d). Into the bargain, Heinz is well known for its ketchup product. The company sells more than 650 million bottles of Heinz ketchup every year to millions of households across the globe. In addition to ketchup, the company also markets an ever-expanding selection of other great tasting foods. Its main products include ketchup, meals, sauces, snacks, as well as infant nutrition. To this end, Heinz Company is committed to enriching all family’s eating experience, whether at home, on the move or dining out (Heinz, n.d). More importantly, Heinz employees are highly skilled and innovative, which facilitate them to create new products, perfect fresh ideas, as well as develop nutritious and innovative foods for today’s families. Heinz Company is a trusted...
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...concept of the “competitive advantage”. The authors suggested three tests to determine the source of competitive advantage. Explain. (You may need to do some reference. Use online databases from library). Definition of 'Competitive Advantage is an advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retains more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support. On the other hand, Competitive advantages give a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage. There 4 attributes of competitive advantage (value, rarity, inimitability and non-substitutability). There are two main types of competitive advantages: comparative advantage and differential advantage. Comparative advantage, or cost advantage, is a firm's ability to produce a good or service at a lower cost than its competitors, which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. A differential advantage is created when a firm's products or services differ from its competitors and are seen as better than a competitor's products by customers. To gain competitive advantage a business strategy...
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...02 FEB, 2016 Individual Assignment Increasing competitive advantage, unit 5 mustafa.malik Contents Competitive Advantage 2 Low Cost Leadership 2 Differentiation 3 Focus on Niche 3 Resources required to execute these strategies 4 Competitive Advantage Objectives Measurement 4 References: 5 Competitive Advantage Businesses always look for a competitive advantage to look different and to offer something right for a selected target audience. Competitive advantage is to indentify customer’s needs, to develop a high quality product with a decent price and to deliver it better than the others. As stated by Cole Ehmke & M.S. a competitive advantage is to answer this question “Why should the customer purchase from this operation rather than the competition? (Cole Ehmke, M.S: 5-01)”. The key point is that a brand has loyal customers for a reason. These loyal customers are often the cause of a successful growing business that builds upon a strong competitive edge than the competitors as stated by Michael E. Porter, a “Competitive advantage is at the heart of a firm's performance in competitive markets (J Collins, Michael E. Porter: 102)”. A competitive advantage can be sourced through many factors such as a high quality product, a superior customer service, less price then rivals, better location, more reliable product than the competitor, better design and providing a better value for money. According to Porter these factors can be categorized into three...
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...7! Be able to! • Identify Strategic Business units in Organisations! • Explain the different bases of achieving competitive advantage! • Explain the factors influencing the sustainability of competitive advantage! • Explain the relationship between competition and collaboration ! 3 ! Strategic Choices ! Exhibit III.1! 4 ! 2 ! Business Level Strategy - Outline! • Strategic business units! • Competitive advantage (strategy clock)! – Price-based! – Differentiation! – Hybrid and focus! • Sustainability of competitive advantage! • Co-operation and competition! • Game theory in competitive strategy! 5 ! Business Level Strategies! Exhibit 5.1! 6 ! 3 ! Strategic Business Units! A strategic business unit is a part of an organisation! for which there is a distinct external market for goods or services that is different from another SBU! • Opposing pitfalls in identifying SBUs! – Too many different products/markets means lack of focus! – Too few means not reflecting diversity of products/markets! 7 ! Criteria for Identifying SBUs! External! Same customer types! Same channels! Similar competitors! Internal! Similar products/ services! Similar technologies! Similar resources and competences! 8 ! 4 ! Bases of Competitive Advantage! • Competitive strategy! – The bases for achieving competitive advantage ! – The bases for providing best value! • Porterʼs generic strategies! – Cost leadership! – Differentiation...
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...QUIZ: CREATING COMPETITIVE ADVANTAGE 1. What is competitive advantage? Competitive advantage referred to an advantage over competitors gained by offering consumers greater value than competitors do. It means that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support. Moreover, it requires delivering more value and satisfaction to target consumers than competitors do. To gain competitive advantage, companies must understanding customers to develop profitable customer relationship. Building profitable customer relationships and gaining competitive advantage requires delivering more value and satisfaction to target consumers than competitors do. 2. How to develop your competitive advantage? This is one of the ways used by company to analyze their competitors, other than value-based strategies for building and maintaining profitable customer relationships. The first step is to analyze the competitors (competitor analysis), which are the process of identifying, assessing, and selecting key competitors. The second step is developing competitive marketing strategies, which give company the greatest possible competitive advantage. It is vital for a company to find out all it can about its competitors. Therefore, here got several...
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...Wal-Mart’s competitive advantage is driven by its low-cost, high volume strategy which aims to increase profits and customer satisfaction. Sustainable competitive advantage indicates a company’s future success and is determined by different factors. These factors include organizational capabilities such as tangible resources, intangible resources and human resources. One main component of sustained competitive advantage is having superior returns sustained over a long period of time. Wal-Mart has had superior returns and has achieved competitive advantage in the market by making industry key success factors advantageous; they are committed to being cost-leaders and achieving ultimate customer satisfaction. However, their low-cost strategy alone does not give them complete advantage over its competitors. It distribution capabilities, supplier relationships, advanced R&D, and culture, added to their low prices, make up the core of Wal-Mart’s competitive advantage. Their efficient distribution, aided primarily by the company’s own distribution centers, creates economies of scale which mesh with the high volume strategy. Wal-Mart’s impressive supply chain management involves dealing directly with suppliers and integrating them into their strategy. This eliminates the middleman, reduces distribution costs and strengthens their relationship with their partners. Wal-Mart’s innovative processes, along with their active collection of customer purchase behavior aid their R&D...
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...Mid-term Review Questions Chapter 1 1. Define strategic competitiveness, strategy, competitive advantage, above-average returns, and the strategic management process. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy. Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. Competitive advantage is when a firm implements a strategy that its competitors are unable to duplicate or find too costly to try to imitate. Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk. Strategic management process is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns. 2. Describe the 21st-century competitive landscape and explain how globalization and technological changes shape it. * The fundamental nature of competition in many of the world’s industries is changing. There are rapid changes in industry boundaries and markets. * Conventional sources of competitive advantage such as economies of scale and huge advertising budgets are not as effective as they once were in terms of helping firms earn above average returns. * The conditions of competitive landscape result in a perilous business world, one where the investments that are required to compete on a...
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... KNOWLEDGE OBJECTIVES 1. Define competitors, competitive rivalry, competitive behavior, and competitive dynamics. 2. Describe market commonality and resource similarity as the building blocks of a competitor analysis. 3. Explain awareness, motivation, and ability as drivers of competitive behavior. 4. Discuss factors affecting the likelihood a competitor will take competitive actions. 5. Discuss factors affecting the likelihood a competitor will respond to actions taken against it. 6. Explain competitive dynamics in slow-cycle, fast-cycle and standard-cycle markets. CHAPTER OUTLINE Opening Case Competition Between Hewlett-Packard and Dell: The Battle Rages On A MODEL OF COMPETITIVE RIVALRY COMPETITOR ANALYSIS Market Commonality Resource Similarity DRIVERS OF COMPETITIVE ACTIONS AND RESPONSES Strategic Focus Who Will Win the Competitive Battles Between Netflix and Blockbuster? COMPETITIVE RIVALRY Strategic and Tactical Actions Strategic Focus Using Aggressive Pricing as a Tactical Action at Wal-Mart LIKELIHOOD OF ATTACK First-Mover Incentives Organizational Size Quality LIKELIHOOD OF RESPONSE Type of Competitive Action Actor’s Reputation Dependence on the Market Popped the Top? COMPETITIVE DYNAMICS Slow-Cycle Markets Fast-Cycle Markets Standard-Cycle Markets SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES NOTES LECTURE NOTES Chapter Introduction: The competitive landscape of the twenty-first century will...
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...COMPETITIVE ADVANTAGE Introduction The aim of strategic management is to determine, create and maintain the competitive advantage of a firm. Competitive advantage is a firm’s ability to provide value to customers that exceed what its competitors can provide. Besides that, competitive advantage can be gained through maximal capitalization of the attributes and resources of the organization. Thus, competitive advantage is a strategy that organizations use to differentiate itself from its’ competitors. Superior value Superior value is a type of competitive advantage when value of products and services that are produced is superior to the competitor’s value. Superior value can be gained by differentiating the company products and service from its’ competitors. For example, FedEx was one of the first companies to introduce package-tracking capability. This tracking capability allows FedEx customer to track their package along its’ route of being delivered. Thus, FedEx gained superior value over its’ competitors by providing such a service. Although other courier services eventually provided such service, FedEx capitalized on its’ superior value and continuously upgrade it. Therefore, other courier services could not match up its package tracking services. Rarity When a company capitalizes on its product/service rarity, it gives the company a competitive advantage where no other firms have the capabilities needed to provide the quality and quantity of product and services...
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...approaches of Jay Barney and Michael E. Porter, two leading strategy theorists, in-turn explaining the basis leading to the difference. What is Strategy & Competitive Advantage? Strategy is the creation of unique and valuable position involving a different set of activities.1 A firm is said to have competitive advantage when it is implementing a strategy which is not is being implemented by it’s current or potential competitors and also sustains profits that exceed the average for it’s industry. " Is Competitive Advantage enough? The goal of much of business strategy is to achieve a sustainable competitive advantage which is the same as competitive advantage but the advantages of the strategy cannot be duplicated by the competitors. (Barney, 1989). Different authors have different viewpoint in regard to sustainable competitive advantage. A sustained competitive advantage is simply a competitive advantage that lasts for a longer period of calendar time (Porter, 1985). A competitive advantage is sustained only after the efforts to duplicate the advantages of the strategy have been ceased (Lippman and Rumelt,1982). " Michael Porter’s Viewpoint Sustainable competitive advantage is when a strategy is implemented and the same strategy is not being implemented by the current or potential competitor and that advantage lasts for a longer period of time. For example, BIC, the pen manufacturing company, has over the years manufactured and sold narrow line of standard and economical...
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...choosing what not to do. The business environment has now become so competitive requiring leaders to develop effective strategies that result in improved competitive. Technology has now made it so easy for competitors to match one’s product within a short space of time. Changes in customer tastes and preferences require robust systems and strategies to maintain current market share profitably and ensure growth. It is within this spectrum that Michael Porter has become a well-known contributor in the field of strategic management as he shades light on which elements to consider in coming up with a strategy for both domestic and international markets. A good strategy will result in the creation of a unique and valuable position, involving a different set of activities. Strategic position emerges from three distinct sources which are serving few needs of many customers, serving broad needs of few customers and serving broad needs of many customers in a narrow market. After positioning itself, an organisation must ensure that its strategic efforts results in creating “fit” among a company’s activities. Fit has to do with the ways a company’s activities interact and reinforce one another. In his endeavour to build strategic intent within organisations, Michael Porter is well known for the following contributions in the field of corporate strategy: 1. Generic Strategies 2. Value Chain 3. Competitive Advantage 4. Porter’s Diamond 5. Five Forces Model 1. Porter’s...
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...Competitive advantage is an edge that a firm has over its competitors, allowing it to generate greater sales or margins and retains more customers than its competition. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage. Competitive advantage has two main types that’s to say comparative or cost advantage and differential advantage. Comparative advantage is a firm’s absility to produce a good or service at a lower cost than its competition, which gives the firm the ability to sell its goods or services at a lower price than its competition to generate a larger margin on sales. Differential advantage when a firm’s products or services differ from its competitors and seen as better than its competitors products by customers. Most entrepreneurs and business owners know that one key to surviving in business is to have a sustainable competitive advantage and below are some of the different sources of competitive advantage: Strong research and development capabilities. A business can gain competitive advantage in its industry if it has strong research and development capabilities. It reflects the company’s product development process. Companies with strong research capabilities often lead the market with innovation. For instance, in the technology industry Apple and Sony are the two companies that have held their leadership position using innovation as a competitive advantage. Access to intellectual properties. The holding...
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...and competences 3. Bases of competitive advantage Competitive strategy is connected with the basis on which a business unit might achieve competitive advantage in its market. Porter proposed three generic strategies to achieve competitive advantage: - Cost leadership - product / service features differentiation - focus 4.The Strategy Clock: competitive strategy options 5.Price-based strategies (routes 1 and 2) Route 1 (No frills’ strategy): A ‘no frills’ strategy’ combines a low price, low perceived product /service benefits and a focus on a price sensitive market segment. - The products or services are commodity - Price sensitive customers - High power and/or low switching cost - Small number of providers with similar market share - Avoid the major competitors 6. Route 2 (Low-price strategy) A low price strategy seeks to achieve of lower price than competitors whilst trying to maintain similar perceived product or service benefits to those offered by competitors. Pitfalls of low price strategy: - Margin reduction - Inability to reinvest - Low cost base 7. Differentiation strategies (route 4) A differentiation strategy seeks to provide products or services benefits that are different from those of competitors and that are widely valued by buyers. Factors to be considered to achieve differentiation strategy: - Perfectly identify strategic customers. - Rightly identify competitors group those are serving in the...
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...VIEWPOINT Core Competence, Distinctive Competence, and Competitive Advantage: What Is the Difference? ANN MOONEY STEVENS INSTITUTE OF TECHNOLOGY HOBOKEN, NEW JERSEY ABSTRACT. Core competence, distinctive competence, and competitive advantage ABSTRACT. are 3 of the most important business concepts that managers, researchers, and educators rely on for decision making, pedagogy, and research. However, little attention has been paid to defining these concepts. As a result, they have become buzzwords that are used so frequently that their meanings are often taken for granted but are not fully understood. In this article, the author reviews the evolution of these concepts in business literature and provides comprehensive definitions, conceptual models, and examples to help clarify and distinguish the concepts so that failures of communication can be avoided. Keywords: competencies, competitive advantage, strategy Copyright © 2007 Heldref Publications 110 Journal of Education for Business S R ince its genesis in the mid-20th century, the study of business disciplines has become an established academic discipline. The proliferation of business curricula, journals, and academic and professional associations is evidence of a dramatic growth in business education. Although the growth has improved the understanding of business and informed business practices, with growth comes various problems. For example, business practitioners, researchers...
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...Sustainable Competitive Advantage Approach Calveta whish is operating dining services is provide their services in senior living market by managing the food service operation to the senior living facilities (SLFs) in the United States. Calveta is very experience in preparing the healthy and nutritious food for old people that is suitable for the residence in the senior living facilities (SLFs). Other than Calveta, there are several players in the senior living market that providing dining service such as Culinair, Robertson and Pinehurst. All of them has operating in a wide market and had diversified their business in hospital, education, sports, business and industry sectors which SLF in one of their division business. The Calveta’s competitors are also having a big amount of revenues compared to Calveta. However, Calveta has their own strategy to maintain their family business in the senior living market. According to the Michael Porter’s competitive advantage strategy, there are two basic types of competitive advantage, first is cost leadership and second is product differentiation. Both competitive strategies can be more broadly narrow that result the third competitive strategy which is cost focus and differentiation focus. The companies is said to be stuck in the middle if they are unable to position in one these strategic advantage and they are unable to compete their business with other competitors in the industry. Competitive advantage is created by using resources...
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