Question

Give an example of a company that has competitive advantage over its rivals through a differentiation strategy. Describe how the company achieves their competitive advantage through differentiation.

Answer 1

Company name: Amazon

For Amazon the biggest rival in the market is Walmart. But Amazon has gained a competitive edge over Walmart in the terms of delivery time. Amazon ensures the fastes delivery and this as a result has helped it to gain a great market share too.

The main reason of Amazon's competitive edge is its differentiation strategy which differentiates it from Walmart. While Walmart has its own strategy of providing products at rock bottom prices, Amazon has its own strategy of lightning fast delivery at your doorstep.

Amazon has achieved this competitive edge due to its inventory management process. It organsies the products in its warehouses randomly rather than organising it in an order while keeping a great track of each and every product. This technique allows a particular product to be present in many different places in a warehouse thus making the product pick-up faster which in turn speeds up the whole process of delivery.

Thus it can be said that Amazon has gained a competitive edge of time efficient delivery by focusing on its differentitation strategy of offering a prime membership.