Harness competitive advantage Porter from "summary" of The 100 Best Business Books of All Time by Jack Covert,Todd Sattersten
Porter's competitive advantage is a well-known concept in business that encourages organizations to gain an edge over their competitors by utilizing their resources effectively. It can be used to formulate strategies that can help them better utilize their strengths and weaknesses to achieve success.- Companies need to be aware of their industry-specific competitive advantage and factors driving success in order to succeed and stay ahead of the competition. According to Michael E. Porter, harnessing a competitive advantage is one of the most essential elements of ongoing business success.
- To gain a competitive advantage, companies can employ a range of techniques including improving product quality, researching customer needs, creating a strong brand presence, reduction of costs and improving efficiency.
- Michael E. Porter developed the Three Generic Strategies model which consists of 'Cost Leadership', 'Differentiation' and 'Focus'. Each strategy provides specific advantages and can help a company build a competitive edge.
- When utilized thoughtfully, Porter's models can help organizations position themselves well within the marketplace and remain consistently profitable. By gaining an understanding of their competitive edge and tailoring their strategies accordingly, businesses can sustain their operations for the long term.
- Differentiation strategies focus on offering unique products or services that stand out from competitors. These can include providing better service or innovative products that have higher value than existing ones. In order for differentiation to work, a company must commit to its unique approach and ensure that its difference is noticed and appreciated by potential customers.
- Organizations focusing on achieving a focus strategy may serve an underserved niche market more effectively than large players. A narrow target group allows a company to provide tailored goods and/or services that cannot easily be matched by generalists.
- Implementing a cost leadership strategy involves taking steps to decrease a product’s production or sales costs while ensuring that the product remains attractive to customers. This can involve producing goods at a larger scale to take advantage of economies of scale, cutting unnecessary costs, and implementing lean manufacturing processes.
