Module - Analysing the Competition

Looking at Your Own Strengths

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Think about your own company, or another business you know well.
In what ways might the company increase its efficiency?
To what extent would any improvements create competitive advantage?
Feedback
Your ideas are most likely to relate to the four listed areas: labour costs, new technology, quality,
and training and development.

You can find useful ideas of how efficiency throughout the business can be assessed and
improved at:

Business Process Modelling: https://kissflow.com/bpm/business-process-modeling/

Quality
The quality of the work done in the organisation affects competitive advantage in many ways. We’ll
focus on just two of them.

First, consider the quality of the output: what does the product or service offer and what does the
customer actually want? It is useful to think about three different kinds of quality:

Design quality - the features of the product or service that appeal to the customer. A Rolls
Royce will not appeal to many teenagers; they would probably prefer to drive a Mini or a
motorbike
Conformance quality - whether the product actually matches its design quality. Will customers
get exactly what the advertisements say they are going to get? The conformance quality of a Mini
can be as high as that of a Rolls Royce if they both meet their exact design specifications.
Reliability - customers may buy a Volkswagen car because it’s reliable. It does what the
manufacturer says it will do: it gets you from your home to your holiday destination. Services can
also be reliable; when you enter a McDonald’s outlet you know exactly what you’re going to get.

Second, think about the need for quality within the organisation. If a particular team’s output conforms
to what is required, and is reliable, then there will be a many resulting benefits. Productivity within the
team will increase, and there will be lower re-work and scrap costs. The quality of the output will also
benefit the other teams that use that output. This focus on the internal benefits of quality output at all
stages is typical of the Total Quality Management approach.

Involve Me

Think about your own company, or another business you know well.
In what ways might the company increase the quality throughout its operations?
To what extent would any improvements create competitive advantage?
Feedback
 Your ideas about quality of output are most likely to relate to the three listed areas: design,
conformance and reliability.

Increasing quality within the organisation is often a more complex task. It could involve absolutely
any aspect of the business, including the quality of cleaning the premises and the quality of
financial reporting by team leaders.

For a useful summary of the Total Quality Management approach, see

Total Quality Management (TQM):

http://www.businessballs.com/dtiresources/total_quality_management_TQM.pdf

Responsiveness to customers
Quality is, of course, also a key factor for customers. How can organisations respond to their
customers and satisfy their needs and wishes? That question becomes particularly relevant in the
current environment, where wishes and needs may change frequently.

No company today could follow Henry Ford’s statement, “the customer can have a car of any colour,
as long as it’s black.” In fact, Ford’s first customers bought the Model T because it was cheaper than
its competitors; something made possible by Ford’s early production-line methods. Once other
companies developed similar production approaches, Ford had to change its marketing approach and
offer a wider range of products.

The marketing approach (as opposed to the sales approach) developed from a change in attitude by
organisations. They realised that it was not enough to simply create products and then work at selling
them. Instead they now try to carry on a ‘continuous dialogue’ with their customers, and so aim to
quickly identify changes in their wishes and needs. The core elements in a marketing process can be
described as:

Markets, and the needs and wants of customers in those markets.

Products that aim to satisfy those needs and wants.
Measures of those products in relation to customer needs and wants: value, satisfaction and
quality.
Exchange transactions between organisations and customers, including sales, warranties and
maintenance contracts.

Involve Me

Think about your own company, or another business you know well.
In what ways might the company improve its responsiveness to customers?
To what extent would any improvements create competitive advantage?
Feedback
Your ideas about responsiveness to customers are most likely to relate to the four listed areas:
markets, products, ways of measuring customer satisfaction, and exchange transactions.

For a useful summary of marketing and building relationships with customers, see

Marketing and advertising tips: http://www.businessballs.com/market.htm

 Note that this summary is wide ranging, so you will probably need to skim read it and focus on
particular sections that relate to your business.

Technology and Innovation

The fourth of the four elements that can lead to competitive advantage is innovation. This may involve
innovation of production, of the product, or of service provision.

A prime example of product innovation occurred at Sony in 1999. They developed a robot pet; a
‘puppy’ that responded to praise and criticism, wagged its tail, did not chew carpets and could be
turned off and put in a cupboard when the owner went on holiday. However, this was a risky launch:
would enough people be prepared to pay at £2,000 for the new toy? In the event, Sony sold their first
production run of 5000 pets in 20 minutes and a later sale of 10,000 created orders for 130,000.

You could probably think of a number of other, more recent examples. There have been a number in
the overlapping area between mobile phones and computing, such as the iPad4 in Autumn 2012.

Innovation of service provision has happened most rapidly in the dot.com marketplace. Although many
developments have failed, some (such as Amazon.com) have revolutionised their market. Considering
this innovation from a marketing viewpoint, it satisfies customers’ want to order books direct from their
homes. With large stocks and fast delivery, the company can provide a quality service. Finally,
payment by credit or debit card provides a simple exchange transaction.

Involve Me

Think about your own company, or another business you know well.
In what ways might the company improve through using technology and through innovation?
To what extent would any improvements create competitive advantage?
Feedback
Your ideas about technology and innovation will in many cases be specific to your own business,
since different businesses will use very different technologies.

The following document describes the nature of technological innovations and provides a
framework to manage technological risks.

Managing Technological
Innovation: https://pdfs.semanticscholar.org/b5b1/75381e7d942f155425d141ccefd785498463.pdf

Unique selling points

As you saw in the preceding sections, there may be many ways in which a business can create
competitive advantage. As a result, a car manufacturer, for example, might be able to claim that its
products were cheaper, more technologically advanced, longer lasting and more fun to drive. This
creates a problem for the marketer. Will the customer who wants to enjoy driving a ‘fun car with new
technology’ actually be attracted by being told that it is cheap to buy?

In practice, marketers usually find it more effective to focus on a single benefit. They will carefully
identify the unique benefit of buying one model (low price) in comparison with others that might offer
high performance, or new technology.

Note also the importance of ‘benefits’. For example:

Mercedes emphasises its great engineering.

 Beecham emphasise three benefits of their three-coloured Aquafresh toothpaste (tooth
protection, clean breath, and white teeth)
United Distillers advertise young men using Bell’s whisky as a mixer to widen its appeal away
from the older age groups.

Although the use of Unique Selling Points (USPs) began as an advertising technique, it is now seen as
a key idea for the whole organisation. It encourages everyone to ask two key questions:
What specific benefit will people get from buying our product?
What does it do that no other product can do? (In other words, is it unique?)
You may also come across the concept of a Positioning Statement. This explains what place a brand
should occupy in the consumer's mind, when compared with its competition. For example, the
positioning statement for Bell’s Whisky would focus on it being the whisky for young men.

Involve Me

Think about a product or service offered by your own company, or another business you know well.
What specific benefit will people get from buying the product?
What does it do that no other product can do?
Feedback
Your ideas will be specific to your own business and product. The aim of the activity is to
emphasise the importance of the two key questions:

How will your customers benefit from using your product or service? If you can’t answer that
question, how can you expect them to buy it?
How does your product or service differ from your competitors’ offerings? If you cannot answer
that question, you can expect people to buy from your competitors.

Show Me

You can find a video clip describing USPs at:

Marketing Strategy Plan - What's Your USP? https://www.youtube.com/watch?v=LYuk9aMWRQ8

You can also find more about USPs, and similar approaches by going to the following web page,
scrolling down, and selecting The Product Offer - FABs, USPs and UPBs:

Sales and selling - training and

techniques: http://www.businessballs.com/salestraining.htm#theproductoffer

This section has described many other aspects an organisation’s strengths. You can find a useful
summary of these on the website:

SWOT Strengths: Understanding Your SWOT

Analysis: https://www.mindtools.com/pages/article/newTMC_05.htm