Question

a. what is the firm's competitive advantage of Campbell list it down one by one?

b. Provide a brief justification of each one.

Answer 1

A)

Examples of Competitive Advantage

1. Access to natural resources that are restricted to competitors
2. Highly skilled labor
3. A unique geographic location
4. Access to new or proprietary technology
5. Ability to manufacture products at the lowest cost
6. Brand image recognition

Constructing a Competitive Advantage

Before a competitive advantage can be established, it is important to know the:

1. Benefit: A company must be clear what benefit(s) their product or service provides. It must offer real value and generate interest.
2. Target Market: A company must establish who is purchasing from the company and how it can cater to their target market.
3. Competitors: It is important for a company to understand other competitors in the competitive landscape.

B)

Cost Leadership

In a cost leadership strategy, the objective is to become the lowest-cost producer. This is achieved through large-scale production where companies can exploit economies of scale.

If a company is able to utilize economies of scale and produce products at a cost lower than competitors, the company is then able to establish a selling price that is unable to be replicated by companies. Therefore, a company adopting a cost leadership strategy would be able to reap profits due to its significant cost advantage over its competitors.

Differentiation

In a differentiation strategy, a company’s products or services are differentiated from that of its competitors. This can be done by delivering high-quality products or services to customers or innovating products or services.

If a company is able to differentiate successfully, the company would be able to set a premium price on its products or services.

#3 Focus

In a focus strategy, a company focuses its product or services towards a narrow-target market segment. This strategy is successful if customers have different needs and wants, and the company is able to successfully create products/services that can cater to these customers. The focus strategy also has two variants;

1. Cost-focus: Lowest-cost producer in a narrow market segment
2. Differentiation-focus: Differentiated products/services in a narrow market segment