ABSTRACT
An asset or skill that gives a company a competitive advantage (see tip #44) in the marketplace is more valuable if it is difficult for others to imitate or copy. Such a sustainable competitive advantage allows the company to reap the benefits from the differentiating factor until other substitutes are made available. An SCA can be related to marketing, production, or even a developed customer base or logo, and it can be achieved by many different strategy formulations. Several examples include:
A strategy of differentiation involves offering a product that is substantially different from the competition. This differentiation is sufficiently unique as to be difficult to emulate. Obtaining patents and other legal protections are common ways to preserve potentially competitive advantages.
A low-cost strategy offers customers a lower price for a product or service, such as a Casio watch or health care from an HMO.
When business units within a larger organization combine sales and marketing or expenses such as office space, billing personnel, plant equipment, and human resources personnel, they are able to reduce their costs.
A focusing strategy involves concentrating on a specialized product or service, or on a small buyer group. Examples include clothing stores for tall men or plus-size women, or an auto muffler service or oil-change service.
A preemptive strategy focuses on being the first supplier with a new product or service. Microsoft and Intel are examples of this preemptive strategy.
