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Adapting Corporate Strategies for Competitive Advantage

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  • 0:02 Competitive Advantage
  • 0:49 Creating or Enhancing Value
  • 2:53 Strategies
  • 5:45 Lesson Summary
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Lesson Transcript
Instructor: LeRon Haire
The lesson will identify and discuss several strategies that can be utilized by corporate organizations. These strategies can be used to gain a competitive advantage in the market and methods that create value for organizations.

Competitive Advantage

Imagine you've created a sub-style sandwich that is somewhat similar to the sub-style sandwiches produced by Subway. Your sandwich has the exact same taste and just so happens to be priced the same. With both products being homogeneous (similar) in several areas, what can you do to help your product stand out against the competition?

A competitive advantage can be described as something that a business does well that is unique and is hard to duplicate. It's important that businesses create strategies that are specifically tailored to gain a competitive advantage and add value to an organization. Let's take a quick look at how competitive advantage helps with creating or enhancing value for organizations and then, we'll look at strategies for competitive advantage.

Creating or Enhancing Value

1. Creating Value in a Multibusiness Enterprise

First, competitive advantage creates value in a multi-business enterprise. Unlike a single business, multi-businesses, also known as diversified businesses, are more complex to understand. For example, Dasani alone is a company that's in the water beverage business. However, their parent company, Coca-Cola, is a multi-business enterprise that has dealings with water, soda, and juices, to name a few. A competitive advantage can help companies create value in a multi-businesses, or diversified enterprises, in the following ways:

  • Helps to identify a declining market where profit is difficult
  • Offers more opportunities opposed to a single business enterprise (diversity)
  • Reduced demand for a good in a single business enterprise due to alternatives and substitutes

2. Capturing Value Talent From Corporate Strategy Acquisitions

Secondly, having a competitive advantage allows a company to consider merger-and-acquisitions, which is when a business is purchased by another and much, if not all, of their work forces are joined together. This can be a great way to add value through acquiring new and untapped talent from another organization. By acquiring talent through mergers and acquisitions, organizations do not have to spend money on recruiting and additional training. The merger ensures that new talent will be trained and ingrained into the culture of the business.

3. Value of Sustainability, Innovation, and Implementation

Third, organizations that have a competitive advantage over their industry rivals have placed themselves in a position to succeed through creating social value through sustainability, innovation, and implementation. Social value is how the public perceives the value of a thing or a process.

An organization's sustainability is key from a social value perspective because it's an indicator of what the public thinks about the long-term prospects for a business. Let's take a look at how sustainability can be an effective way to help generate innovation in organizations:

  • Empowering employees to make decisions on behalf of the organization
  • Helping employees to think outside of the box for ideas
  • Establishing goals and objectives to be met

Strategies

Let's now take a look at some strategies for competitive advantage that businesses can implement.

1. Emphasizing Product Features

First, businesses should place an emphasis on the features of a product. Let's use your sub-style sandwich as an example and assume that you're wanting to emphasize how healthy your sandwich is to eat. Below are two methods that can be used to place emphasis on the features of a product:

  • Use deceptive design packaging
  • List benefits of feature

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