Question

What other sorts of ‘competitive weapons’ can you list that exist today in our firms and industries?

Answer 1

1. Technology as a competitive weapon: The firms can exploit technology as a competitive weapon. The degree to which the top management of the company has technical orientation, selection criteria that support and maintain technology and systems and structures that reinforce the company's technological orientation can serve as competitive weapons for the firms or an industry to grow in the marketplace.

Even if two firms have same financial resources, and one of the firm spends most of its resources on buying plant and equipment that reduces its production cost, it will serve as a competitive weapon for that firm.

2. Price discrimination can also serve as a competitive weapon for the firms and indistries. Price discrimination can open up new markets, as it did for Casio watches. It can also be very successful if it is based on considerably lower costs of production and operation. In general, however, it is less effective weapon, because if a competitor is willing to accpet losses, he can strike back immidiately.

3. Product differentiation: This gives the firm an edge over others in terms of the product design, packaging etc. Differentiation can be both horizontal or vertical. It can serve as a competitive weapon both ways. For example, Netlix and Amazon have used the strategy of vertical differentiation to gain competitive edge.