Question

1. Strategy to overcome/control the issue on 'Sustaining Competitive Advantage'. Explain and give an appropriate example.

Answer 1

In order to overcome/control the issue on 'Sustaining Competitive Advantage' businesses need to constantly stay ahead of their market competition by being innovative and creative with their products and services. This can be achieved by following the below-mentioned strategies:

i) Understanding the market segments and developing strategies: The first step towards developing a Sustainable Competitive Advantage strategy is to identify the evolving market segments and develop products and services accordingly. This is a vital aspect of  Sustaining Competitive Advantage as identifying niche markets before competitors give an early movers' advantage and is the first step towards achieving sustainable competitive advantage. For example, car manufacturer Tesla Inc. was the first car company to understand the need for Electric Vehicles and have since its inception been the leading car manufacturer in that segment.

ii) Adapting to the evolving needs of the customers: With time the needs and requirements of the customers also undergo changes. Therefore, as a company, in order to maintain a sustainable competitive advantage, it is imperative that the company is able to adapt its strategies and products based on those changing consumer needs. The company should be able to deliver the value proposition to its customers at all times, failing which the company may lose its competitive advantage. Good examples of this are Tech Giants like Google and Facebook that have constantly been innovative with their products and expanded their range of products in accordance with the growing and diverse needs of their customers.

iii) Supportive business model: Lastly, it is important to have a supportive business model that is financially viable while at the same time is able to deliver the value proposition to its customers. Every market comes with its unique set of challenges and in order to deal with them, it is necessary to have a sound financial strategy that can forecast revenue, costs, and capital needs and identify limits for expense budgets. Only through effective resource allocation can a company be able to sustain competitive strength and remain a market leader. An example of such a company is Amazon which has been able to maintain a viable business model while delivering excellent customer service and value proposition.