In the last few decades, technology has been changing the way companies do business. The companies who do not change to adapt to the new technology have fallen behind and closed their doors, while other companies have thrived and made record profits. Technological change is just one of the main factors of the competitive landscape that managers need to adapt to in order to strive in the business world. For managers to be successful, they need to learn how to control the competitive landscape and then effectively manage for the competitive advantage. Managing for competitive advantage is the difference between life and death of a company. For the survival of the company, managers have to gain advantage over their competitors by using better innovation, quality, service, speed, and cost competitiveness.
As the world advances in time, new products need to be created and produced. The introduction of new goods and services is called innovation. Innovation is important for companies because if they do not produce new products, they will die. Competing companies are constantly introducing new products that are better than their competitors. Because of this, older products are becoming outdated every day. Unfortunately for managers, products do not stay as long as they used to and new products must be created more often to compete with competitors. The most important innovation isn’t the product itself; it is the way the product is delivered. The internet allowed companies to bypass face-to-face sales, allowing customers around the globe to purchase products from a company. When this started to happen, businesses had to innovate and adapt to this technological change and get on the internet to open up sales around the world.
If a customer has a bad experience at a certain business, they won’t return to that business and will go to a competitor. They probably deemed the quality of their product or service to be poor. The excellence of a good or service is called quality. Companies can produce good quality products by doing three main things. They can prevent defects before they occur, achieve zero defects in manufacturing, and design the products for quality rather than quantity. The quality of the product is decided by the customers. . The best way to determine the quality of the product is by surveying the customers. Surveys can be oral or written. Oral surveys are generally short and completed on the spot. An oral survey occurs when you are sitting in Applebee’s or other restaurant and a manager comes out to ask about the quality of the food and service. Written surveys are generally conducted for products or services that require some more reflection. Hospitals will generally have a short written survey asking about the quickness, quality, and staff relations. If the hospital manager realizes that patients aren’t getting good service, they will make policy adjustments and take suggestions from patients to make their service better. To make quality products, you need to understand quality. Quality is measured using product performance, customer service, reliability, conformance to standards, durability, and aesthetics. For a company to survive, managers must be able to recognize these features in a product and effectively come up with a way to produce a product with quality.
Service is an important measure of quality. If a company produces the best physical, it does not mean that it has the best service. An example of service is when Wal-Mart sells the same laptop as Best Buy but at a lower price. However, Wal-Mart doesn’t have the same quality of service as Best Buy if the laptop happens to break. Best Buy has the “Geek Squad” which gives them an edge in the service department because they are able to repair the broken laptop. The speed and dependability with which an organization delivers what customers want is classified as service. Service is focused on continuously meeting the needs of customers and establishing mutually beneficial relationships. Best Buy’s warranty programs and computer services allows them to establish this mutually beneficial relationship to bring customers back and keep them happy even after the purchase is finalized.
Google and Yahoo! are in direct competition as search engines on the internet. Both companies are consistently updating their systems so that they are faster and more accurate. Speed doesn’t only mean the speed of the service, but it also means the fast and timely execution, response, and delivery of results. Speed can also refer to how fast a company comes out with a new product. General Motor’s made a mistake when they designed the original Chevy Volt. The product had problems with safety because of the types of battery used. Because General Motors worked too quickly and didn’t think about the potential problems of the product, they had to restart the product from scratch. This cost the company millions of dollars initially, plus the money of the extra time to restart the product and the potential profit they could have made if the product was built correctly the first time. Speed is critical to a company’s success. The faster a company can design and create a product with quality, the more potential profit it can make.
Wal-Mart’s main strategy involves cost competitiveness. Their “Rollback” strategy drives their success because they offer the same products as other retailers, but at a lower price. How can Wal-Mart offer the same products at a lower price than other retailers? It’s because of cost competitiveness, which means they keep costs low to achieve profits while offering prices that are attractive to consumers. Efficiency is the key to cost competitiveness. Wal-Mart has increased their efficiency by using a computerized scheduling system that analyzes each store’s sales, transactions, units sold, and customer traffic. This system determines the minimum number of workers that should be on-hand and what their hours should be.
Managing for the competitive advantage is not easy for managers. It is easy for managers to get busy and lose sight of the company’s goals and performance. The goal of managers should be to improve all five factors of competitive management. However, managers will not always be able to accomplish them all and they will have to make trade-offs. A manager might sacrifice speed to ensure the production of a quality product. An important note of managing for competitive advantage is to not focus on one factor and neglect the others. If you do, the other factors will decrease and you will lose your competitive advantage. Managing for competitive advantage is not easy and it takes practice. Learning about the different aspects of managing will help managers keep their companies alive.