Question

• Will the actions described be a source of competitive disadvantage, parity, temporary advantage or sustained competitive advantage? Explain your answers.
  • Procter & Gamble introduces a new, smaller packaging for its Tide detergent.
  • Ford patens a new kind of brake pad for its cars.
  • American Airlines announces a five percent across-the-board reduction in airfares.
  • Ted Turner uses his money made from his broadcasting empire to purchase the Atlanta Braves.

Answer 1

Theory: competitive disadvantage: It is defined as is an unfavorable circumstance or condition that causes a firm to under perform in an industry.

parity is the state or condition of being equal.

Temporary advantage: Peoples changing taste may prefer a product at a particular time.

sustained competitive advantage: A long-term competitive advantage that is not easily duplicable.

Explain your answers.

• Procter & Gamble introduces a new, smaller packaging for its Tide detergent: : If it is matching the competitor then it will bring parity otherwise temporary advantage as people with smaller budget may go for tide.

• Ford patents a new kind of brake pad for its cars.: A patent will grant ford a sustained competitive advantage: A long-term competitive advantage that is not easily duplicable by other firms.

• American Airlines announces a five percent across-the-board reduction in airfares.Temporary advantage. Till the time others decrease the price American Airlines may get more customers. However, if this leads to price wars then actually it will be disadvantage for them.

• Ted Turner uses his money made from his broadcasting empire to purchase the Atlanta Braves.:sustained competitive advantage: Company will get a permanent name and it will be repeated every time the Atlanta braves gets a game.