Efficient supply chain management and logistics can offer a significant supply of real sustainable competitive advantage. Quite simply a situation of creating brilliance above your market challengers for client satisfaction might be accomplished by greater control over your logistics and supply chain management.
Foundations for business success that are available on the market are wide ranging – clients and competitors – the 3Cs, however a straightforward design relies across the triangular relationship within the value chain of your company.
Seeking a lasting and sustainable competitive advantage is just about the problem faced by any serious business manager – who’s aware of the reality of his/her industry.
At the most elemental level, achievement stems from whether price advantage or even any value advantage are available. Fact is that, most profitable rival in almost any market sector is commonly the low-cost provider.
Put simply, and – even greater – the combination of two – effective businesses possibly have steady value advantage and they will use it in creating long term business strategies.
Cost advantage provides the offering and product a differential plus above competitive offerings.
In numerous sectors there will typically be a single competitor that will certainly function as the low-cost producer. When you are looking at price advantage there’s considerable evidence to point out that big is beautiful. This is supported by scale, yet much more especially to the outcome of experience curve, which allow fixed costs being spread on a higher volume.
By improving marketplace presence traditionally it’s been suggested the primary path to price decrease had been through higher product sales. The pursuit of economies of scale by quantity increases might not always result in higher profit for the business. This is because currently much of price of an item is away from the internal company operations and driven by the overall supply chain dynamics.
That is by better supply and logistics management. Logistics and supply chain management can offer numerous methods to boost effectiveness and efficiency and hence lead considerably to decreased overall and unit costs.
For example, these competitive advantages might be intangible as well. The delivered product might be viewed as to outperform the rivals in a few practical aspect, in addition to prices or product quality.
How the competitive advantage might be accomplished?
Essentially the improvement of the methodology based on additional values will certainly usually need a much more divided strategy to marketplace. That you will find distinct value segments when a business scrutinizes marketplaces. Different categories of clients in the market attach various significance to various benefits.
Frequently you will find considerable possibilities with regard to creating appeals for particular segments and the market segmentation should be the very first step in business strategy development.
It is today the actual situation that every business model is accomplished in a number of ways and not based on a single strategic move.
Adding value by being different is really an effective way of attaining an advantage within your market. This is in many cases achieved by strong product portfolios – for example Toyota, Honda, GM and Ford – they all provide a wide targeted selection of product versions positioned at various prices within the market segments that they are after.
This on hte other hand obviously creates challenges with regard to logistics management. This is why competitive advantage is strongly related to supply chain and logistics management these days. It is no longer enough to offer a better product. The power is within the delivery and servicing.
There is really a trend in lots of markets of decline within the power of branding. Equally important in the way of adding customer value is support, logistics and services.
By focusing on support as the way of getting competitive advantage is something a lot of companies have taken care of already. A perfect example for this is Amazon. High on product offering and high on logistics and supply chain performance – it is very very hard for others to compete with Amazon.
Main sources of creating powerful competitive advantage
Next time you work on developing a new business strategy or reviewing your current approaches – focus on the 3 major areas in creating competitive advantage:
- Cost advantage
- Product advantage
- Logistics advantage