Developing Competitive Advantage

Question 1

What is competitive advantage? And how is it obtained?

Answer 1

• competitive advantage is the ability or capability of a firm to outperform competitors in the marketplace
• SWOT analysis is a useful framework to identify competitive advantages
• firms might know their competencies but might not know how they become advantages
• a detailed SWOT can aid managers identify and develop competitive advantages

Question 2

How do you make a SWOT analysis as productive as possible?

Answer 2

1. Stay focused on using series of SWOT analyses
2. Detail description of competitors (present and future)
3. Collaborate with other functional areas across the company
4. Examine issues from the customer perspective
5. Look for causes, not features
6. Distinguish internal from external issues
7. Base it on facts and relevant internal and external sources

Question 3

What are the strength and weaknesses in a SWOT analysis?

Answer 3

• they exist because of resources possessed (or not possessed) by the firm or they exist
• due to the nature of key relationships between the firm and its customers, its employees, or outside organizations
• are both in the present situation
• it must be leveraged into capabilities or overcome
• are meaningful only when they assist or hinder the firm in satisfying customer needs

Question 4

How do firms generally achieve competitiveness?

Answer 4

A combination of:

• operational excellence
• product leadership
• customer intimacy
• brand differentiation

Question 5

What are the opportunities and threats in a SWOT analysis?

Answer 5

• involve issues or situations that occur I’m the firms external environments (not potential marketing actions)
• should not be ignored due to focus on developing strengths
• may stem from changes in PESTLE

Question 6

When developing organizational goals what needs to be assured?

Answer 6

1. They are attainable (good change they will be met)
2. consistent (align and relate to competencies and competitive advantage)
3. Comprehensive ( they should cross function within the organization, assumed by all relevant departments)
4. Intangible (statement of where we aim to go)

Question 7

Distinguish between discontinuous and continuous objectives?

Answer 7

Continuous objectives:

• current objectives are similar to previously set objectives in planning period
• objectives slightly modified over time don’t need new strategies, more effort or better implementation

Discontinuous objectives:

• significantly elevate the level of performance on a given outcome factor
• typically require new strategies to achieve higher performance

Question 8

What is downward stretch?

Answer 8

• company initially located at the top end of the market and then “stretches” downwards to pre-empt a competitor, respond to an attack. May devalue the brand

Question 9

What can be used to measure brand equity?

Answer 9

1. the CBBE model:
   - it is a way of assessing the value of the brand in customers minds
   - branding can increase profitability in large and small scale businesses by filling in gaps in customer knowledge and by offering assurance
2. BAV model (Young and Rubicam):
   - differentiation: degree to which a brand is seen as different
   - energy: brand momentum
   - relevance: breadth of a brands appeal
   - esteem: how well regarded and respected it is
   - knowledge: familiarity and intimacy

Question 10

What is upward stretch?

Answer 10

• companies stretching upwards to add prestige to their existing range of products
• can be risky due to customer perception and inability of sales people to trade up and negotiate to the new level
• easier to decrease than to raise price

Question 11

What is two- way stretch?

Answer 11

• extending product lines upwards and downwards to address different segments of the market

Question 12

What is a strategic focus?

Answer 12

• development of an overall concept or model that guides the firm, weaving marketing elements together into a strategy.
• typically tied to competitive advantages
• use results of the SWOT analysis
• lays the ground work for development of marketing goals and objectives

Question 13

What are the four make directions the firm considers for its strategic Efforts?

Answer 13

1. Aggressiveness
2. Diversification
3. Turnaround
4. Defensiveness

Question 14

What are marketing goals?

Answer 14

• broad, desired accomplishments that are stated in general terms.
• indicated direction firm attempts to move in and set of priorities it will use in evaluating alternatives and making decisions
• some degree if intangibility

Question 15

What are marketing objectives?

Answer 15

• specific and quantitative benchmarks that can be used to gauge progress towards the achievement of the marketing goals