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Competitive Advantages Part II

Competitive Advantages Part II. BMI3C. Review…. What are some of the ways that products can gain advantage over one another?. From yesterday…. With a partner, list 10 products, and their main competitive advantage What are the most sustainable competitive advantages?. Competitive Advantage.

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Competitive Advantages Part II

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  1. Competitive AdvantagesPart II BMI3C

  2. Review… • What are some of the ways that products can gain advantage over one another?

  3. From yesterday… • With a partner, list 10 products, and their main competitive advantage • What are the most sustainable competitive advantages?

  4. Competitive Advantage • We’ve discussed the competitive advantages that products can have over one another, but what about services? • What services does your family use? • List on board • What would make one service better than another in this category?

  5. Service Competition Factors • Service businesses are marketing intangibles, things that cannot be touched • They compete with each other by attempting to gain a competitive advantage using: • convenience, degree of service, selection, reputation, and price

  6. Service Businesses • Set up solely to perform specific services for customers • Ex: Parcel delivery service

  7. Value-added service • A company that provides activities to support the sale of their product or service • Ex: a store that offers free home delivery of the customers’ purchases

  8. Convenience • To make something easier or more comfortable • Ex: Internet shopping • To gain the competitive advantage, some offer value-added services • Ex: 30 minute delivery for pizza, drive-through window for fast food • Some service companies sell convenience • Ex: limo service, cleaning service

  9. Degree of Service • Some businesses offer similar services, with the competitive advantage coming from the quality or variety of the services offered • Ex: hair salon • Some companies cut out services to lower costs • Ex: Airlines, Ikea

  10. Selection • Some offer a greater selection of services • Ex: video store • The selection can be wide – meaning a large number of different types of merchandise OR the selection can be deep – meaning a large quantity of one specific type

  11. Reputation • Since service is intangible, the business must maintain a good reputation • Service evaluation is frequently communicated to consumers through magazines, newspapers, television • Word of mouth is more important • Good reviews bring more business, bad reviews can ruin it • The internet facilitates great sharing of reviews and experiences

  12. Price • If the two services are similar, the business with the lower price has the competitive edge • Prices depend on supply & demand • Ex: Vacations cost more during peak season • Specialized services have no standard price – when services are needed, people are willing to pay a great deal of money to get them • Ex: lawyers, architects, gourmet chefs, computer consultants

  13. Activity • Write up a review of a movie you have recently seen

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