Course work

Competitive advantages of the enterprise

Introduction

1. Theoretical foundations of competitive advantages of an enterprise

1.1 Concept and essence of competitive advantages

2.2 Organizational structure of Arnest OJSC

Conclusion

Since a typical mistake when analyzing this problem is the confusion of the concepts of competitiveness and competitive advantage, therefore, let us clarify these concepts.

“The competitiveness of a product is an integral comparative characteristic of a product, a comprehensive assessment of its parameters (consumer, economic, organizational and commercial) relative to market requirements or the parameters of similar products. The real competitiveness of a product is determined only by comparing its parameters that are significant for consumers with the characteristics and conditions of sale of similar competing products. ”

“Competitiveness is a property of an object, characterized by the degree of actual or potential satisfaction of a specific need in comparison with similar objects presented on a given market. Competitiveness determines the ability to withstand competition in comparison with similar objects in a given market. ”

The competitiveness of a company is the ability to compete in the market with other manufacturers and suppliers of similar products, both in terms of the degree to which their products or services satisfy the specific needs of customers, and in terms of business efficiency. It is most often assessed by company specialists, and competitive advantages are assessed by consumers who compare the offers of the company and its competitors. In this sense, the concept of competitive advantage is also relative. Competitive advantages make it possible to achieve greater consumer commitment; accordingly, they largely determine the company’s competitive strategy, i.e. the way she competes.

“Competitive advantage is the distinctive features of a company and its product in the eyes of consumers. ”

“Competitive advantages of subjects can be hereditary, constructive, technological, informational, qualification, managerial, natural and climatic, etc.”

“The competitive advantage of a system is any exclusive value that the system possesses that gives it an advantage over its competitors. ”

“The key factors for success in competition are usually called those factors arising from market requirements that can give a company an advantage over its competitors. ”

“Rivalry among existing competitors often comes down to the desire to achieve an advantageous position by all means, using tactics of price competition, product promotion and intensive advertising. “

“Knowledge of the company’s capabilities and sources of competitive influence will allow us to identify areas where the company can enter into open confrontation with competitors, and where it can avoid it. If a company is a low-cost producer, it will be able to counteract the power of consumers because it will be able to sell products to consumers that are not vulnerable to substitute products. ”

Sources of competitive advantage are varied, but most often they are based on:

On operational efficiency, i.e. performing similar activities better than competitors (quality of service or product quality, hours of operation and location, speed of service, cost advantage, etc.);

Strategic positioning, i.e. carrying out different types of activities from competitors or performing similar activities, but in other ways. Strategic positioning is based on an advantage that is unattainable by competitors (key competitive advantage). This could be the uniqueness of a product or service, brand image, technological leadership, a unique combination of activities, etc.

So, a company's offering must be meaningful to consumers in order to be classified as a competitive advantage. However, the degree of significance varies.

“For a certain factor to become a company’s competitive advantage, it must be of key importance to consumers and at the same time be based on the uniqueness of the company’s business. ”

The most cited author in foreign and domestic literature on the theory of competition and management of competitive advantages is M. Porter. The next paragraph of the course work will examine Michael Porter's theory of competitive advantage.

1.2 Michael Porter's Theory of Competitive Advantage

To survive or win in fierce competition, any system must have certain advantages over its competitors. In recent years, almost every book on competition, competitive advantage or competitiveness has referenced the seminal book International Competition by Michael Porter.

M. Porter proposed a set of standard strategies, which are based on the idea that each of them is based on a competitive advantage and the company must achieve it by choosing its strategy. It must decide what type of competitive advantage it wants and in what area.

“Thus, the first component of strategic choice according to this model is competitive advantage, which is divided into two main types: lower costs and product differentiation. ”

“Low costs reflect a firm's ability to develop, produce, and sell a comparable product at a lower cost than a competitor. By selling a product at the same (or approximately the same) price as its competitors, the company in this case makes a greater profit. ”

Differentiation is the ability to provide the buyer with unique and greater value in the form of new product quality, special consumer properties or after-sales service. Differentiation allows a firm to dictate high prices, which, at equal costs to competitors, provides greater profits.

It is difficult, but not impossible, to gain a competitive advantage based on both lower costs and differentiation. However, any effective strategy must pay attention to all types of competitive advantage, although not strictly adhering to any one of them. A firm that focuses on low costs must still provide acceptable quality and service. Similarly, a firm that produces differentiated products must not be so expensive as its competitors that it is a detriment to the firm.

“A company’s competitive advantage is determined by how clearly it can organize relationships with suppliers and consumers. By better managing these relationships, a firm can gain a competitive advantage. Regular and timely deliveries can reduce a firm's operating costs and reduce inventory levels required. These relationships arise when the method of one activity affects the cost or efficiency of others. »

Connections often lead to the fact that additional costs for “adjusting” individual activities to each other pay off in the future. Firms must incur such costs in accordance with their strategy for the sake of competitive advantage

M. Porter notes that firms gain a competitive advantage:

Based in those countries that allow the most rapid accumulation of specialized resources and skills;

If in the company's home country there is more accessible and accurate information about the needs for goods and technologies;

If ongoing investment is possible;

If the interests of owners, managers and staff coincide.

“Thus, one of the main objectives of many organizations is to achieve an advantage over its direct competitors. The central question is: how will the organization gain this advantage? M. Porter gives an answer to this important question, highlighting key overall strategies. ”

Three such strategies are cost leadership, customization and focus. Each of them will be discussed sequentially in the next paragraph of the course work.

1.3 Strategies for achieving competitive advantage according to M. Porter

Strategies for achieving competitive advantages belong to the group of competitive strategies, which can also include strategies for behavior in a competitive environment. Each of these strategies is based on the need to achieve a specific competitive advantage.

“Competitive advantages are understood as unique tangible or intangible assets of a company or special competence in areas of activity that are important for a given business (equipment, trademark, ownership of raw materials, flexibility, adaptability, personnel qualifications, etc.). ”

Note that competitive advantages in modern firms do not always relate to production technology; very often they move to the stage of marketing, service, R&D, management and financial innovation. Competitive advantages, as a rule, are realized at the level of strategically) business units. Let's consider the features of the main strategies for achieving competitive advantages.

Analyzing the competitive environment and determining the competitive position of the organization involves determining the complexity and dynamism of the competitive environment. Universal methods of such analysis are M. Porter's five forces model and competitor cost analysis.

The five forces model involves conducting a structural analysis based on determining the intensity of competition and studying the threat of market penetration by potential competitors, the power of buyers, the power of suppliers, and the threat of substitutes for a product or service.

Analysis of competitors' costs comes down to identifying the strategic factors that control costs, cost analysis itself, and modeling competitors' costs.

“To gain a competitive advantage, a company can use three general competitive strategies: cost leadership (the goal is to achieve cost leadership in a specific area through a set of measures to control them); in a given area), focusing (task - focusing on a specific group, market segment or geographic region). ”

Cost leadership. When implementing this strategy, the goal is to achieve cost leadership in its industry through a set of functional measures aimed at solving this particular problem. As a strategy, it involves tight control of costs and overheads, minimizing expenditure in areas such as research and development, advertising, etc. It also requires a whole layer of buyers who perceive the advantage of low costs, expressed in prices.

A low cost position gives an organization good returns in its industry even if there is stiff competition in its industry. A cost leadership strategy often creates a new basis for competition in industries where intense competition in various forms is already established.

Personalization. This strategy involves differentiating an organization's product or service from those offered by competitors in the industry. As Porter shows, the approach to individualization can take many forms, including image, brand, technology, distinctive features, special services to customers, etc.

Customization requires significant research and development as well as marketing. In addition, buyers should give their liking to a product as something unique. A potential risk of the strategy is changes in the market or the release of analogues that competitors may initiate, which will destroy any competitive advantage that the company has already achieved.

“A focus strategy involves selecting a narrow segment or group of segments in an industry and meeting the needs of that segment more effectively than competitors serving a broader market segment can. The focus strategy can be used either by a cost leader that serves a given segment or by a differentiator that meets the special requirements of a market segment in a way that allows it to charge a high price. ”

So firms can compete on a broad front (serving multiple segments) or focus on a narrow area (targeted action). Both focus strategies are based on the differences between the target segments and the rest of the industry. It is these differences that can be called the reason for the formation of a segment that is poorly served by competitors who operate on a large scale and do not have the ability to adapt to the specific needs of this segment. A cost-focused firm can outperform broad-based firms because of its ability to eliminate excesses that are not valued by that segment.

When choosing this strategy, the main objective is to concentrate on a specific group of consumers, market segment or geographically isolated market. The idea is to serve a specific target well rather than the industry as a whole.

It is assumed that the organization will thus be able to serve a narrow target group better than its competitors. This position provides protection from all competitive forces. Focus may also imply cost leadership or product/service customization.

1.4 Strategies for achieving competitive advantage according to F. Kotler

F. Kotler offers his own classification of competitive strategies based on the market share owned by the enterprise (firm):

1. “Leader” strategy. The “leader” company in the product market occupies a dominant position, and its competitors also recognize this. The leading firm has a whole range of strategic alternatives at its disposal:

Expansion of primary demand, aimed at finding new consumers of a product, expanding the scope of its use, increasing the one-time use of a product, which is usually advisable to use in initial stages product life cycle - a defensive strategy adopted by an innovating firm to protect its market share from its most dangerous competitors;

An offensive strategy, most often consisting of increasing profitability by maximizing the use of experience. However, as practice shows, there is a certain limit, beyond which further increase in market share becomes unprofitable;

A demarketing strategy that involves reducing one's market share to avoid accusations of monopoly.

2. “Challenger” strategy. A firm that does not occupy a dominant position may attack the leader, i.e. challenge him. The goal of this strategy is to take the place of leader. In this case, the key becomes the solution of two important tasks: choosing a springboard for carrying out an attack on the leader and assessing the possibilities of his reaction and defense.

3. “following the leader” strategy. A “follower” is a competitor with a small market share that chooses adaptive behavior by aligning its decisions with those of competitors. This strategy is most typical for small businesses, so let’s take a closer look at possible strategic alternatives that provide small businesses with the most acceptable level of profitability.

Creative market segmentation. A small firm should focus only on certain market segments in which it can better exercise its competence or has greater agility in order to avoid clashes with leading competitors.

Use R&D effectively. Since small businesses cannot compete with large firms in basic research, they must focus R&D on improving technology to reduce costs.

Stay small. Successful small businesses focus on profit rather than increasing sales or market share, and they strive for specialization rather than diversification.

A strong leader. The influence of the leader in such firms extends beyond the formulation of strategy and communication of it to employees, also covering the management of the day-to-day activities of the company.

4. Specialist strategy, “Specialist” focuses primarily on only one or several market segments, i.e. he is more interested in the qualitative side of the market share.

It seems that this strategy is most closely associated with M. Porter's focusing strategy. Moreover, despite the fact that the “specialist” company dominates in a certain way in its market niche, from the point of view of the market for a given product (in a broad sense) as a whole, it must simultaneously implement a “following the leader” strategy.

1.5 Classification of an organization’s competitive advantages

The management of an enterprise's competitive advantages is carried out using the same management functions as the management of other objects.

“The factors of an organization’s competitive advantage are divided into external, the manifestation of which depends to a small extent on the organization, and internal, almost entirely determined by the organization’s management. »

Table 1.1 List external factors competitive advantage of the organization

External factor of an organization's competitive advantage	What needs to be done to achieve and use competitive advantage in Russian conditions
Country competitiveness level	Open an organization in a country with a high level of competitiveness or increase the competitiveness of your country
Industry competitiveness level	Take measures to improve the competitiveness of the industry or leave it for another, more competitive industry
Level of competitiveness of the region	Take measures to increase the competitiveness of the region or leave it for another, more competitive region
Government support for small and medium-sized businesses in the country and regions	Rework the legislative framework for small and medium-sized businesses, focusing it on efficient and law-abiding business conduct
Legal regulation of the functioning of the economy of the country and regions	Rework the legislative basis for the functioning of the economy as a system of codes and rights (competition, antimonopoly, administrative, labor, etc.)
Openness of society and markets	Development of international cooperation and integration, international free competition
Scientific level of economic management of a country, industry, region, etc., applicability of tools of the new economy	Application of the economic laws of the functioning of market relations discussed in topics 2-5, laws of organization in statics and dynamics, 20 scientific approaches to management and specific principles of managing various objects, management methods at all levels of the hierarchy. If the leader does not master scientific methods, the performer is unlikely to master them
National system of standardization and certification	Intensification of work in this area, strengthening control over compliance with international standards and agreements, legal support for harmonization with the international system
State support for human development	Increase spending on education, healthcare and social services in the Russian budget tenfold
State support for science and innovation	Improve the transfer system (development of innovations, their innovation and diffusion), increase budget expenditures on science tenfold
Quality of information support for management at all levels of the hierarchy	Creation of unified national information centers in areas or sectors of the national economy that meet the latest science and technology
Level of integration within the country and within the international community	Russia's entry into international organizations and development according to international laws
Tax rates in the country and regions	Review the tax system, align and unify rates if possible
Interest rates in the country and regions	Review the interest rate system at all levels of management and investment areas
Availability of accessible and cheap natural resources	Increase the share of mined and subsoil resources in state ownership to no less than 50%. To debug state control over the expenditure of resources
System of training and retraining of management personnel in the country	The receipt of international, government and sponsorship investments in this area and their expenditure should be under control state control and give specific results
Climatic conditions and geographical location of the country or region	Protect the natural environment, improve the quality of the habitat and develop competitive advantages in this area
Level of competition in all areas of activity in the country	Comprehensively form and implement market relations

Table 1.2 List of internal factors of an organization’s competitive advantage

Internal factor of an organization's competitive advantage	What needs to be done to achieve and use competitive advantage
production structure of the organization	Design organizations based on flexible production systems, automated modules and systems
mission of the organization	The mission must contain an original idea, an exclusive field of activity, a competitive product, a popular trademark, brand, etc.
organizational structure of the organization	The organizational structure should be built on the basis of a tree of organizational goals with horizontal coordination of all work by a manager for a specific product (problem-target organizational structure)
Production specialization	Carry out organization design based on an analysis of the principles of rationalization of structures and processes, using modeling methods
level of unification and standardization of manufactured products and components production	Perform the entire range of work on unification and standardization of various objects in order to organize them by standard sizes, types, methods, etc.
accounting and regulation of production processes	Include in the structure of the organization means for automating the accounting of compliance with the principles of proportionality, continuity, parallelism, and rhythmicity of individual processes.
staff	Constantly select personnel, improve their qualifications and create conditions for promotion, motivate high-quality and effective work in order to ensure the competitiveness of personnel
information and normative-methodological management base	When designing and developing structures, information systems should include high-quality information and regulatory and methodological documents
the force of competition at the output and input of the system	When choosing a field of activity and suppliers of raw materials, materials, components, equipment, personnel, analyze the strength of competition and select competitive suppliers
Resource: suppliers access to high-quality cheap raw materials and other resources	Constantly analyze the competitive environment, the number of suppliers, the strength of competition between them, their competitiveness to select the best. Monitor market parameters so as not to miss possible access to high-quality and cheap raw materials
accounting and analysis of the use of all types of resources at all stages life cycle large facilities of the organization	Encourage such analysis, since in the future, saving resources among consumers of their goods will be a priority activity of the organization, a factor of competitive advantage
optimization of resource efficiency	Support efforts to optimize resources, since the global goal of competition is to save resources and improve the quality of life
Technical: Proprietary Product	Continue working to increase the number of inventions and patents
patented technology and equipment	Increase the share of advanced technological equipment and reduce its average age
quality of goods manufacturing	Apply modern methods quality control and stimulation to maintain a competitive advantage
Managerial: managers	Increase the share of competitive managers
analysis of the implementation of organizational laws	Based on the results of the analysis of the organization’s laws, measures should be developed and implemented to improve processes
organizing the supply of raw materials, materials, according to the “just in time” principle	Maintaining this competitive advantage requires high discipline throughout the entire material flow cycle.
functioning of the management system (competitiveness) of the organization	Develop and implement a system
functioning of the quality management system in the organization	Further maintaining this competitive advantage requires highly qualified personnel and the use of scientific management methods
carrying out internal and external certification of products and systems	The quality management system must comply with international standards ISO 9000:2000. scientific approaches and principles of quality management
Market: access to the market for resources needed by the organization	To obtain this advantage, it is necessary to study the parameters of markets at the input of the system (organization), and to maintain it, monitor the market infrastructure
leading position in the product market	To maintain this main advantage, it is necessary to constantly take measures to maintain all the competitive advantages of the organization
exclusivity of the organization's product	This advantage is achieved by the high patentability of products, which, in turn, ensures their competitiveness compared to substitute products
exclusivity of distribution channels	This advantage is achieved by a high level of logistics and is maintained by competitive marketers and sales employees
exclusivity of advertising of the organization's products	To maintain an advantage, highly qualified advertising workers and sufficient funds for it are required.
effective system of sales promotion and after-sales service	The advantage is achieved by highly qualified economists, psychologists and managers of the organization and. of course, with the necessary means
Forecasting pricing policies and market infrastructure	To maintain this competitive advantage, it is necessary to analyze the operation of the laws of demand, supply, competition, etc. for your products, to have a high-quality information base and qualified specialists.
Effectiveness of the organization: Profitability indicators (based on profitability ratios of products, production, capital, sales)	Economic indicators determine the quality of the organization’s functioning in all aspects and areas. Therefore, to maintain its competitive advantages, an organization must increase scientific level management.
Intensity of capital use (by turnover ratios of types of resources or capital)	Levels of profitability, intensity of capital use and financial sustainability of the organization are determined individually
financial stability of the organization's functioning	The higher the strength of competition in the industry, the lower the profitability and cost of goods will be, but the higher the quality of goods.
Share of exports of knowledge-intensive goods	Competition is also a factor in increasing the efficiency of using all resources.

Listed in table. 1.1 and 1.2 external and internal factors of an organization's competitive advantage are the maximum possible for an abstract organization. For a particular enterprise, the number of competitive advantages can be any.

“The value of each benefit can be quantified and analyzed over time. However, it is hardly possible to integrate all the benefits into a single indicator. ”

In principle, the more competitive advantages an organization has over current and potential competitors, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to increase the scientific level of management, gain new competitive advantages and look more boldly into the future.

1.6 Key factors for competitive success

Key success factors are usually called those factors arising from market requirements that can give a company an advantage over its competitors.

For example, a key factor may be an “ecological niche,” i.e., needs not satisfied by existing manufacturers that can be satisfied by the proposed product (or, more often, for which a completely new product should be developed).

Thus, each firm looks for a market segment that is not occupied in this moment, and is approved on it, which ensures commercial success. Naturally, each time the “ecological niche” was significantly different.

Key success factors may also be changes in the distribution network, in the policy for choosing a commodity production system, etc.

“The key factors are always revealed by comparing your product and your company with competitors. After comparison, the top administration decides on which indicators it should outperform its competitors, and on which indicators it should stay on the same level with it or even concede in some way. ”

It should be remembered that sometimes the key success factors turn out to be of such a nature that the company is not able to own them on its own. This casts serious doubt on the advisability of entering this field and should be the subject of close attention from the company's management.

“When managing key factors, the first thing you need to do is figure out what—“ external environment” or “internal environment” of marketing is responsible for creating obstacles to the use of key success factors. Next, decide whether the company is able to change the current state of affairs; if yes, develop a change program, and if not, explore the possibility of working in another market or in another sector. ”

The role of elements of the internal structure of the company, which are called “responsibility centers,” is very significant in this matter. Very often, this is where the key success factors are hidden. Responsibility centers are those units that are assigned special tasks in achieving planned financial indicators.

Cost centers are production units that set standards for the consumption of materials and labor resources. The goal of the managers of these centers is to minimize deviations of actual costs from planned ones.

Sales centers are sales divisions that are prohibited from reducing prices in order to increase sales volumes, but are required to strive for maximum sales volumes.

Discretionary centers are administrative units in which it is not possible to strictly establish cost/result standards: here it is necessary to ensure the maximum good quality activities with flexibility in the marketing budget expense item.

Profit centers are usually all divisions that are in one way or another tied to the lines of the “product orientation” structure, and the volume of profit is set based on those elements of marketing that the corresponding division is actually capable of managing.

Investment centers. In them, the indicator of efficiency is the “return on capital” (profit minus tax on capital used). All these centers (divisions of the company) are endowed with such rights so that they can make the most of their resources. Thus, the key factors of competitiveness provide the company with advantages in the competitive struggle, which explains the need for their use in the activities of the enterprise.

2. Managing competitive advantages in the organization

2.1 Characteristics of the activities of Arnest OJSC

The Arnest company is a Russian leader in the aerosol business in the field of high technology, production volumes and product sales. The company spends a lot of time and money on implementing social programs. For more than 30 years, Arnest has been producing cosmetic products and household chemicals.

Form of ownership: private property. Organizational and legal form: open joint stock company.

“A joint stock company is a company that authorized capital which is divided into a certain number of shares. Shareholders, i.e. owners of shares of a given company are not liable for its obligations, but bear the risk of losses associated with the activities of the company, within the value of the shares they own, i.e. bear limited liability. ”

“Joint stock companies are divided into open and closed. In the first case, the company's participants can alienate the shares they own without the consent of other shareholders; in the second, the shares are distributed only among the participants. The number of shareholders of an open joint stock company is unlimited. ”

Among famous brands: “Charm”, “Symphony”, “Lyre”, “Deadly force”, “Garden”, “Mebelux”, etc. Thanks to the active development of these brands, the company traditionally maintains a leading position in the market for hair styling products, air fresheners, universal insecticides and polishes.

The company's assortment is constantly being improved and today it includes more than 350 products. The high quality of products has been repeatedly confirmed by the most prestigious awards.

The enterprise is equipped with the most modern high-quality equipment from leading European companies. The production capacity is 150 million aerosol packages and 15 million polymer bottles per year.

Arnest was the first in Russia to reach the international level of production and product quality control; it has an ISO 9001 quality system certificate and an environmental certificate of compliance with ISO 14001-98 requirements.

Today, the company's products are represented in all cities of Russia, CIS countries, the Baltic states and Iran. Among the key partners of the enterprise are world-famous European perfumery and cosmetics companies: “Schwarzkopf”, “L`oreal”, “Unilever”, as well as the Russian concern “Kalina”.

The Arnest company is focused on producing high quality products and strives to maximize customer satisfaction. The use of the most modern innovative technologies allows Arnest to maintain its leader status in Russia.

The most important objectives of the company are:

Maintaining and improving leadership positions in the main segments of the aerosol market,

Uniting all employees of the Company based on common business objectives, corporate values, principles, norms and rules,

Constantly expanding our presence in cosmetics, household chemicals and insecticides through geographic expansion and entering new, potentially attractive markets and segments.

The Arnest company provides a full range of product manufacturing services:

Purchase or production at the enterprise of components of primary (aerosol can or polymer bottle) and group packaging;

Purchasing all types of raw materials from the most the best manufacturers from anywhere in the world, or work with customer-supplied raw materials;

Additional cleaning at the enterprise itself and bringing hydrocarbon propellants to the required pressure;

Mixing ingredients active substance and its filling into aerosol cans and polymer bottles on the lines of European manufacturers;

Pre-press preparation and adaptation of designs to the requirements of Russian legislation;

Development of recipes according to submitted consumer requests;

Certification of the finished product with registration of the entire set of necessary documents;

Storage of the finished product in our own warehouses;

Development of optimal logistics schemes for delivering the finished product to customer warehouses.

The organization under study operates within the framework of an organizational development strategy and, in particular, a moderate growth strategy, the use of which presupposes agility; use of external resources; business diversification; expansion of basic research; concentration of efforts on the implementation of innovations.

Prospects further development JSC Arnest is due to increased consumption of products by Russian and foreign buyers.

Despite the growth in production volumes, the company has not yet reached the required level of implementation, allowing the team to stably and purposefully solve the challenges facing it in managing competitive advantages.

2.2 Organizational structure of the JSC"Arnest"

The functions of managing the activities of an enterprise are implemented by divisions of the management apparatus and individual employees, who at the same time enter into economic, organizational, social, psychological relationships together.

The organizational structure of the personnel management system is a set of interrelated units of the personnel management system and officials.

There is a high degree of centralization of management. Management principles that form the basis of the organizational structure:

Hierarchy of management levels, in which each lower level is controlled by a higher one and is subordinate to it;

Correspondence of the powers and responsibilities of management employees to their place in the hierarchy;

Division of the labor process into separate functions and specialization of workers according to the functions performed;

Formalization and standardization of activities, ensuring the uniformity of employees’ performance of their duties and the coordination of solving various tasks.

The board is headed by the president and consists of several members appointed by the board of directors. It manages certain areas of work, its members take part in resolving issues at board meetings. The board provides the general meeting of shareholders with an annual report, balance sheet and profit distribution project. Functions of the board: current planning; management of research and development, production, sales; development of a specific direction of action, programs and methods; making decisions on organizational forms of management; delegation of powers to officials at lower levels of management; carrying out personnel policy; control over the financial position of the company; approval of company budgets; control over the profitability of operations; ensuring intra-company communications and settlements.

The most important criteria for the quality of the board’s work are: ensuring stable profits, optimal sales volume, high quality and novelty of products, as well as services provided to consumers.

The middle level of management is designed to ensure the efficiency of the functioning and development of the company by coordinating the activities of all departments.

Central services are functional services that carry out the most important management functions: marketing, planning, coordination, accounting and control, management of scientific, technical and production and sales activities. The basis of the activities of central services is the coordination of the work of the relevant departments in production departments. The main activity of central services is the implementation of functional connections:

The lower level of management is focused on the operational solution of problems in organizing economic activities within structural divisions, the main task of which is to fulfill established tasks for producing products and making a profit.

Production departments include smaller units - departments, sectors. The departments are headed by managers who have complete independence in solving current problems.

2.3 Marketing strategy and goals of Arnest OJSC

In the context of the development of market relations, JSC Arnest pays special attention to operational and almost everyday analysis of various aspects of the enterprise’s marketing activities.

The highest, main goal of an enterprise in a market economy is to maximize profits. However, at certain stages of the development and functioning of an organization, there are also intermediate goals, for example: to ensure break-even operation; win a large share in the market of goods and services; regulate product supply in accordance with demand; expand the sales market; ensure maximum growth of indicators;

Each of these intermediate goals always acts as a means to achieve the main (main) goal. The main strategic goal of Arnest OJSC is to maintain long-term competitiveness in the Russian aerosol business market. To achieve this goal, Arnest OJSC implements the following strategies:

1. Focus on the Russian and CIS markets, growth through development through the expansion of the domestic market.

2. Increasing the volume and share of product sales for export.

3. Customer-oriented development strategy - implementation of corporate orders for the manufacture of products, creation of discount systems, development and implementation of discounts for regular customers of company stores.

Marketing strategy of Arnest OJSC:

Increasing the number of sales while reducing production costs;

Concentration on a promising market segment;

Product differentiation;

Development of discount systems and customer cards for buyers;

Creation of a club of like-minded clients;

Creating a client-oriented strategy.

2.4 Analysis of the market and competitive environment of Arnest OJSC

Continuous monitoring of the competitive environment is a necessary condition for an analytical assessment of the market situation and orientation of production to meet market needs in the most effective way.

To ensure high-quality management at the enterprise, promising strategies in the field of competitiveness must be developed, and the necessary organizational measures must be provided for all aspects of economic management.

The main competitors of the enterprise are: LLC "Plant of Household Chemicals", CJSC "Dzerzhinsky Plant of Household Chemicals", CJSC "Spektr", LLC "Vershina", CJSC "Factory of Household Chemicals". The figure shows the occupied share of Arnest OJSC in the market of aerosol product manufacturers, as well as the share occupied by its main competitors.

Rice. Market share distribution

Increasing competition while simultaneously expanding the aerosol products market creates additional requirements for updating the range and improving product quality. The advantages of competitors can lead to the loss of customers, both existing and potential; and also lead to loss of market share.

To prevent this from happening, the enterprise must find and eliminate the reasons for lagging behind competitors, as well as try to “outdo” the competitor with other advantages.

“Consumer organizations tend to have clear guidelines regarding the purchase of goods in such markets. These are the popularity of the goods, the reliability of the seller, the stability of quality, the certainty of delivery, and the affordability of prices. At the same time, under certain conditions, certain specific factors may become more important. ”

Essentially, any superiority over competitors is achieved through innovation, and therefore the ability to introduce new technical and technological elements in the activities of an enterprise that provide market advantages is a necessary component of the competitiveness of an enterprise. In a highly competitive environment, superiority in quality, price and distribution is a vital factor for market success today.

2.5 Quality policy of JSC Arnest as a competitive advantage

The priority goal of Arnest OJSC is to meet the requirements and expectations of consumers and other interested parties, maintaining the company's image on this basis and increasing the competitiveness of products.

To achieve this goal, JSC Arnest carries out:

Constant updating of the assortment, increasing the production of new types of products;

Introduction of new technologies based on modern equipment;

Compliance with environmental legislation and other mandatory requirements in the field of ecology;

Decline negative impact its activities on the environment;

Formation of environmental culture of personnel;

Training of all employees on quality and environmental issues;

Involving staff in quality improvement activities;

Formation of mutually beneficial partnerships with all stakeholders;

Improving the integrated quality management system of JSC Arnest, in relation to perfumery and cosmetic products and household chemicals, in accordance with the requirements of GOST R ISO 9001-2001 and GOST R 14001-98.

The management of Arnest OJSC undertakes to follow this Policy and provide the necessary resources and conditions for its implementation by all employees.

The Russian company ARNEST declared itself as a high-level enterprise, having received in 2000 a certificate of compliance with the requirements of the international quality standard ISO 9001-96.

In April 2003, the quality management system was recertified according to the new version of the ISO 9000 series standards.

In December 2004, the environmental management system of JSC Arnest was certified for compliance with the requirements of ISO 14000 series standards.

Obtaining these certificates means that the company cares not only about the quality of its products, but also about the environmental situation in the region.

Product reliability is ensured by the types of control existing at the enterprise, ranging from incoming control of raw materials and materials to control of finished products.

The compliance of products, semi-finished products, parts, and raw materials with international standards is controlled through an extensive network of documentation. Mandatory requirements for products are provided:

The reliability of the packaging and composition of the product guarantees the safety of life and health of customers.

Manufacturing products using ozone-friendly propellant helps protect the environment.

2.6 Competitive advantages of the Arnest Company

The main competitive advantages of the Arnest company are:

Availability of our own strong brands in the main market niches;

Availability of ISO 9001-2001 (quality management system), ISO 14001-2000 (ecology);

Own production of aluminum cylinders. In Russia, besides Arnest OJSC, such production exists only at one plant. It must be emphasized that almost half of all aerosol products can only be filled into aluminum cans. This applies to hair styling mousses (foams), deodorants and antiperspirants, a number of antistatic agents, some cleaning products and all other products with aggressive formulations. In addition to the uniqueness of aluminum cylinders, their production has much higher mobility compared to the production of tin cylinders, which is based on initial printing on tin, followed by folding and soldering of rolled sheets;

In-house production of European standard valves and spray devices, including heads of several configurations, caps and spray caps of several types. JSC Arnest has implemented a full cycle of production of valves and nozzles, which allows not only to fully meet the filling needs, but also to sell them to customers separately. The quality of manufactured valves and caps satisfies the needs of transnational customers;

Production of tin cylinders. On the territory of Arnest OJSC there is a German enterprise for the production of tin cylinders with a capacity of up to 100 million pieces. in year. The quality of the products makes this manufacturer the only enterprise in Russia whose products meet the demand of transnational customers for tin packaging for contract filling of aerosols;

Modern storage of hydrocarbon propellants and equipment for cleaning of hydrocarbon propellants. There is production of 8 different pressures and mixtures for the entire range of products.

JSC Arnest has its own plant for the production of propellants, while none of the Russian manufacturers of aerosols and up to 90% of the world's manufacturers have these capabilities, but purchase ready-made mixtures. In addition, a serious competitive advantage is the UVP purification system, which allows you to purchase unrefined cheap isobutane fraction and have one of the main components of aerosols at least 40% cheaper than competitors;

Own warehouses of raw materials and finished products: the presence of a logistics warehouse for "L"Oreal, the presence of its own temporary storage warehouse (temporary storage warehouse) for customs clearance of imported goods. A warehouse terminal (11 thousand sq. m.) is being completed;

Own STC (scientific and technical center) - development of recipes, certification, state. registration. Own accredited chemical analysis laboratory;

Implemented ERP system MS Axapta;

A wide and developing distribution network, currently numbering more than 100 companies in Russia and abroad;

A strong management team focused on the end result.

Based on the above analysis of the competitive advantages of the Arnest company, we can conclude that the company is conducting a successful labor activity for the production and sale of aerosol products, including due to the fact that it can withstand competition in comparison with similar objects in this market.

Conclusion

To summarize, it should be noted that in order to survive or win in fierce competition, any organization must have certain advantages over its competitors.

Knowledge of the company’s capabilities and sources of competitive influence will allow us to identify areas where the company can enter into open confrontation with competitors, and where it can avoid it.

The more competitive advantages an organization has over current and potential competitors, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to increase the scientific level of management and gain new competitive advantages.

The Arnest company is a Russian leader in the aerosol business in the field of high technology, production volumes and product sales.

The company's strategy is to find optimal ways to offer consumers products of the highest quality. The organization is constantly increasing the range of products offered and strives to develop the marketing component of the business.

Also, the priority goal of Arnest OJSC is to meet the requirements and expectations of consumers and other interested parties, maintaining the company's image on this basis and increasing the competitiveness of products.

A study of the competitive advantages of the Arnest company shows the successful work of the enterprise in the production and sale of aerosol products, including due to the fact that the company has certain advantages over its competitors in this market.

Bibliography

1) Belyaev V.I. Marketing: fundamentals of theory and practice. – M.: KNORUS, 2005. – 672 p.

2) Burtseva T.A., Sizov V.Ts., Tsen O.A. Marketing management. – M.: Economit, 2005. – 271 p.

3) Tooth A.T. Strategic management. – M.: Prospekt, 2007. – 432 p.

4) Lapusta M.G. Enterprise director's directory. – M.: INFRA-M, 2004. – 912 p.

5) Markova V.D. Marketing management. – M. Omega-L, 2007. – 204 p.

6) Okeanova Z.K. Marketing. – M.: Prospekt, 2007. – 424 p.

7) Pankrukhin A.P. Marketing. – M.: Omega-L, 2007. – 656 p.

8) Parakhina V.N., Maksimenko S.V., Panaseenko S.V., Strategic management. – M.: KNORUS, 2007. – 496 p.

9) Petrov A.N. Strategic management. – St. Petersburg: Peter, 2007. – 496 p.

10) Porter M.E. Competition. – M.: Williams, 2005. – 608 p.

11) Razdorozhny A.A. Management of an organization (enterprise). – M.: Exam, 2006. – 637 p.

12) Reznik G.A., Spirina S.G., Introduction to the specialty “Marketing”. – Rostov n/d.: Phoenix, 2006. – 224 p.

13) Sinyaeva M.A. Marketing in small business. – M.: UNITY-DANA, 2006. – 287 p.

14) Titov V.I. Enterprise economy. – M.: Eksmo, 2008. – 416 p.

15) Fakhtudinov R.A. Strategic management. – M.: Delo, 2005. – 448 p.

16) Fakhtudinov R.A. Managing the competitiveness of an organization. – M.: Eksmo, 2006. – 544 p.

17) Tsakhaev R.A., Murtizalieva T.V. Aliev S.A., Fundamentals of Marketing. - M.: Exam, 2005. – 448 p.

Reznik G.A., Spirina S.G., Introduction to the specialty “Marketing”. – Rostov n/d.: Phoenix, 2006. – 87 p.

Markova V.D. Marketing management. – M. Omega-L, 2007. – 136 p.

Reznik G.A., Spirina S.G., Introduction to the specialty “Marketing”. – Rostov n/d.: Phoenix, 2006. – 100 p.

Reznik G.A., Spirina S.G., Introduction to the specialty “Marketing”. – Rostov n/d.: Phoenix, 2006. – 101 p.

Lapusta M.G. Enterprise director's directory. – M.: INFRA-M, 2004. – 16 p.

Titov V.I. Enterprise economy. – M.: Eksmo, 2008. – 36 p.

Okeanova Z.K. Marketing. – M.: Prospekt, 2007. – 160 p.

Talk about the number of completed projects, the volume of products produced, publish successful cases. It is very important not to slip into self-praise, but to show how much real benefit your products or services brought.

Are your services useful? Tell us about it!

Post reviews from real customers with links to their social media profiles/company websites so that potential clients can get confirmation. 90% of people will not check the authenticity of these reviews, but such openness on your part will earn their trust.

High level of quality/service

And the standard continuation: “Our company employs highly qualified specialists who have undergone special training.”

At all The qualifications of specialists do not indicate the level of service, unless your employees took courses on “How to lick a client.”

Take the example of hotels for which international service standards have been developed. A person entering a three-star hotel already has a rough idea of ​​what awaits him: a room with an area of ​​at least 12 square meters. m, free bottled water, bathroom with towels, soap and toilet paper.

What can a client expect in your company?

Write to him how quickly the repair will be carried out or the goods will be delivered. Explain how the personal manager will work to solve his problem - step by step, from receiving the application to the result. Convince him that even after completing the order you are always ready to help.

Imagine calling a company about a large contract, and the sales representative replies, “We’re having lunch, call us later.” And hangs up. Will you call him back or find another supplier?

If the company's employees are not polite and friendly, your “high level of service” is worthless.

What can your employees do?

And if you want to boast about the professionalism of your employees, tell us about them separately: where they received their qualifications, how long they have been working in their specialty and what they can do.

Individual approach

This expression has not convinced potential customers for a long time, it is so hackneyed. Most often, they simply don’t notice him, and if they do, they grin skeptically, mentally saying “well, well, of course.”

Don't believe me? Look through the websites of your competitors - in 99 cases out of 100 you will find this phrase, if not on the “About the Company” page, then on some other page.

Replace general phrases with specific information.

List point by point everything you rely on when developing a project or completing an order. Explain what you mean by the concept of “individual approach”.

Surely put fulfilling the customer’s wishes first. But you understand that others are doing the same thing. Agree, it’s hard to imagine a designer who makes a red kitchen for clients who dream of a green one.

Show HOW you fulfill customer desires

Write, what is included in your system of relationships with customers →

• How do you satisfy the needs of each client depending on the specifics of the tasks assigned to them. What exactly do you take into account when developing a project or completing an order?

• What additional terms of cooperation can you include in a standard contract at the client’s discretion: different payment schemes, individual discounts, delivery, assembly.

• How broad are the powers of the client who wishes to participate in the process or observe it with the possibility of adjustment. At what point are wishes no longer accepted?

Low prices and/or great deals

Another “nothing” stamp. And if you consider that not only low, but also high prices can drive sales with equal success, then this advantage becomes completely useless.

Are you trying to attract customers with low prices? Do not do it this way!

Instead of empty words use honest numbers.

For example: we offer Scandinavian-style kitchens at prices starting from 20,000 rubles per square meter; the basic package includes standard sections, a countertop, a sink, and a dish dryer.

Or: in January we are reducing the cost of the “Chicardos” collection by 30% - when ordering a kitchen 3 meters long, you save 25,000 rubles.

Most often, companies that have nothing else to attract a client say about low prices. Don't deny the buyer minimum math skills. Believe me, he will do a great job of comparing prices on his own.

When choosing a product, the buyer compares several alternative (not identical!) options:

• wooden houses - with brick and aerated concrete
• white gold jewelry - with silver and platinum
• facial mesotherapy - with sculptural massage and plasma lifting.

Make a comparison table, based on the results of which your proposal wins as the safest, fastest to achieve, durable (warm, prestigious, comfortable - select the advantages of your product or service). And then the price will fade into the background.

A wide range of

These 18 characters without spaces will only become an advantage when the client sees them as a solution to their problems →

Decipher what it gives a wide range of

• Possibility of choosing from a specific product range. You can offer dozens or even hundreds of gold rings, but the buyer is interested in a specific size. And if it is not on the display of the online store, for the client the slogan about the richness of the assortment will remain zilch. An initially loyal visitor will go to competitors next time, so as not to be disappointed again.

• Opportunity to purchase related products- a lid for the frying pan, a brush for collecting animal hair - for the vacuum cleaner, wipes for cleaning the screen - for the monitor. This is beneficial for both parties. The client buys everything in one place and saves on delivery, the seller increases profits by 5-15%.

• Possibility to order a turnkey service. When you talk about a company's wide range of services, list them. Indicate which of them you provide separately and which ones only as a package. For example, a consulting company performs naming exclusively as part of a multi-stage company registration service, while assistance in preparing documents may be outside its scope.

Often a list of useless benefits is posted in the “About Us” section. Already fixed it? Great! Now check whether you have used all the ways to persuade customers on the “About” page. Look into the arguments that hit the mark.

And admit in the comments, do you often have professional professionals with an individual approach working in your companies? 😉

About the author.

In the article we will talk about the likely areas of competitive advantages using examples of world-class companies, we will look at the features of creating business advantages in different industries: in the banking sector, in the tourism and hotel markets, we will separately talk about the specifics of creating competitive advantages for wholesale and retail stores, taking into account modern global trends.

1. Universal for everyone
2. Advantages in the field of trade

Universal for everyone

Let's start the list of our examples of competitive advantages with 12 best methods their formations, which are prepared by analyzing leading industries, global brands and large markets. The point of all the examples outlined below is that there is no single correct formula for creating competitive advantage. You can win in any market. It is important to find that feature of the business that can ensure the highest level of profit for the company.

Research and Innovation

The IT branch is the most technologically equipped area of ​​business. Each player in this market strives to become a leader in innovative solutions and developments. In this industry, those who set the pace for the development of innovations and technologies are in the lead and receive super profits. Apple and Sony are striking examples of two companies that have achieved leadership in the IT market through the use of innovation as a sustainable competitive advantage.

Brand awareness

Global recognition, fame and respect for the brand has allowed companies such as Coca-Cola and Virgin to maintain their market share and dominate the market for many years. Higher brand awareness and a positive brand identity have also reduced the costs for Virgin to capture new parts of the market.

Corporate reputation

The highest level of corporate reputation can also serve as a source of competitive advantage in the market. Price Waterhouse (consulting and auditing) and Berkshire Hathaway (investments, insurance) have used this competitive advantage to give their companies world-class status.

Patents

Proprietary technologies are assets that can provide a company with a competitive advantage in the long term. In world practice, methods of purchasing companies due to the ownership of patents and other protected technologies are widely used. General Electric is known for becoming one of the most powerful companies in the world through its ownership of patented designs.

Economies of scale

Dangote Group has become one of the leading manufacturing conglomerates in Africa due to its ability to create products in greater volume and maintain uniform prices throughout its trading area.

Quick access to reverse capital

In world practice, OJSCs win over private companies due to their ability to attract the highest level of investment in a very short period of time. For example, Oracle attracted investment to purchase more than 50 companies in just 5 years.

Barriers to entry

Country restrictions on rivals; a country's protectionist policies can serve as a competitive advantage for local companies. Example, Telmex (telecommunications company, Mexico) or Chevron (energy, USA).

The highest quality product and level of service

The highest level of service is always a strong competitive advantage of a product. IKEA has gained a strong position in the market by being able to provide superior product performance at low cost and the highest level of after-sales service.

Exclusive

Coscharis Group has seized leadership in the Nigerian market by possessing exclusive rights to distribute BMW vehicles throughout West Africa.

Elasticity

The ability to quickly adapt to market changes has provided Microsoft with a leading position in the global software market.

Speed ​​and time

Concentrating all efforts on achieving the greatest speed and reducing service completion times has given companies such as FedEx and Domino Pizza a growing and sustainable position in the industry.

Low prices

The low-price strategy and the ability to maintain, strengthen and develop it have provided the Wall-Mart retail chain with global leadership and the highest level of company capitalization.

Improved database processing

GTBank, AT&T, Google, Facebook have achieved global leadership thanks to advanced technologies and achievements in the field of processing and managing large volumes of information.

Advantages in the banking services market

In this section, we will offer top tips for developing competitive advantages for companies in the banking sector. The weakening of the economies of European countries in modern world, the increasing level of volatility in the global economy leads to the need to revise the basis of the competitive advantages of the monetary sector. In 2013 - 2015, it will be more profitable and important for the banking sector to concentrate efforts on developing subsequent competitive advantages:

• increase in return on capital
• achieving leading positions in profitability in one or more areas of banking activity (in other words, transition to specialization and provision of the best interest rates for narrow market niches)
• improvement of banking services, speed and convenience of transactions by updating and simplifying business processes
• achieving leadership in safety, reliability and asset protection
• development of mobile Internet banking and increase in the technological level of service provision
• Simplification of shopping and reduction of commissions using bank cards(including the creation of guarantees for payment cancellation in case of negligent execution of sales contracts - following the example of the PayPal payment system)

Advantages in the hotel services market

In order to choose the right competitive advantage, be sure to conduct a comparative analysis of the criteria for the provision of services by your hotel company and its competitors. More successful examples of competitive advantages for the hotel business:

• leadership in service level
• low cost advantage (subject to the existence of the ability to obtain higher profits compared to competitors)
• provision of free meals or other additional services
• the most profitable loyalty programs that stimulate repeat purchases and more frequent implementation of hotel services
• comfortable location of the hotel for certain groups of clients
• availability of all necessary additional services (conference room, wi-fi, internet, swimming pool, beauty salon, restaurant, etc.)
• a unique style of decoration and hotel service, allowing the consumer to immerse themselves in a completely new environment

Advantages in the tourism services market

In order to choose the right competitive advantage, be sure to conduct a comparative analysis of the criteria for the provision of services by your company and its competitors. More successful examples of competitive advantages for tourism businesses:

• leadership in the level of service provision
• focusing on the quality of service for certain customer groups
• the ability to set low prices (subject to the ability to obtain higher profits compared to competitors)
• ease of use of the service and minimization of client time
• the most profitable loyalty programs that stimulate repeat purchases
• leadership in one of the types of tourism (see example of tourism market segmentation)
• availability of all necessary related services
• the most noteworthy travel programs
• availability of a mobile application and the highest technology of the service
• the most profitable flaming tours

Advantages in trading

More successful examples of competitive advantages for the trade industry (using the example of a retail store): breadth of assortment, exclusivity of sales in a certain area, the ability to set low prices, leadership in warranty period and after-sales service, availability of free prizes for the buyer, leadership in the attractiveness of promotions -offers, leadership in quality, freshness, modernity of products sold; personnel competence; ease of selection, convenience of selection and time saving for the buyer; computerization of business and the presence of web trading; the most profitable loyalty programs; advice from professionals on choosing products for the buyer; Convenient location of the retail outlet.

The world does not stand still, information is constantly updated, and market participants are in search of marketing ideas, ways of doing business, and new views on their product. Any business is tested for strength by its competitors, so when developing a development strategy, it is wise to take into account their influence, market share, positions and behavior.

What is competitive advantage

Competitive advantage is a certain superiority of a company or product over other market participants, which is used to strengthen its position when reaching the planned level of profit. Competitive advantage is achieved by providing the client with more services, higher quality products, relative cheapness of goods and other qualities.

A competitive advantage for a business provides:

– prospects for long-term growth;

– stability of work;

– obtaining a higher rate of profit from the sale of goods;

– creating barriers for new players when entering the market.

Let us note that competitive advantages can always be found for any type of business. To do this, you should conduct a competent analysis of your product and the competitor’s product.

What types of competitive advantages are there?

What allows you to create competitive advantages for a business? There are 2 options for this. First of all, the product itself can provide competitive advantages. One type of competitive advantage is the price of a product. Buyers often prefer to buy a product only because it is cheap relative to other offers with similar properties. Due to its low cost, a product can be purchased even if it does not provide much consumer value to buyers.

The second competitive advantage is differentiation. For example, when a product has distinctive features that make the product more attractive to the consumer. In particular, differentiation can be achieved through characteristics that are not related to consumer properties. For example, due to the trademark.

If a company creates a competitive advantage for its product, it can uniquely differentiate its position in the market. This can be achieved by monopolizing part of the market. True, such a situation contradicts market relations, since the buyer is deprived of the opportunity to choose. However, in practice, many companies not only provide themselves with such a competitive advantage of the product, but also maintain it for quite a long time.

4 criteria for assessing competitive advantages

Utility. The proposed competitive advantage should be beneficial to the company's operations and should also enhance profitability and strategy development.

Uniqueness. A competitive advantage should differentiate a product from its competitors, not replicate them.

Security. It is important to legally protect your competitive advantage and make it as difficult as possible to copy it.

Value for the target audience of the business.

Strategies for Competitive Advantage

1. Cost leadership. Thanks to this strategy, the company receives income above the industry average due to the low cost of its production, despite high competition. When a company receives a higher rate of profit, it can reinvest these funds to support the product, inform about it, or beat competitors due to lower prices. Low costs provide protection from competitors, since income is preserved in conditions that are not available to other market participants. Where can you use a cost leadership strategy? This strategy is used when there are economies of scale or when there is a prospect of achieving lower costs in the long term. This strategy is chosen by companies that cannot compete in the industry at the product level and work with a differentiation approach, providing distinctive characteristics for the product. This strategy will be effective when there is a high proportion of consumers who are price sensitive.

• Information about competitors: 3 rules for its collection and use

This strategy often requires unification and simplification of the product to facilitate production processes and increase production volumes. It may also require a high level of initial investment in equipment and technology to reduce costs. For this strategy to be effective, careful control of labor processes, product design and development, with a clear organizational structure is required.

Cost leadership can be achieved through certain opportunities:

– limited access of the enterprise to obtaining cheap resources;

– the company has the opportunity to reduce production costs due to accumulated experience;

– management of the company’s production capacity is based on the principle that promotes economies of scale;

– the company provides for scrupulous management of its inventory levels;

– strict control of overhead and production costs, abandoning small operations;

– availability of technology for the cheapest production in the industry;

– standardized production of the company;

2 steps to building a competitive advantage

Alexander Maryenko, project manager of the A Dan Dzo group of companies, Moscow

There are no clear instructions for creating a competitive advantage, taking into account the individuality of each market. However, in such a situation, you can be guided by a certain logical algorithm:

Determine the target audience that will buy your product or influence this decision.

Determine the real need of such people related to your services or products, which is not yet satisfied by suppliers.

2. Differentiation. When working with this strategy, the company provides unique properties for its product that are important to the target audience. Consequently, they allow you to set a higher price for the product compared to competitors.

A product leadership strategy requires:

– the product must have unique properties;

– the opportunity to create a reputation for high quality product;

– highly qualified employees;

– the ability to protect competitive advantage.

The advantage is the ability to sell the product at higher prices than the industry average, avoiding direct competition. Thanks to this strategy, it is possible to achieve better commitment and loyalty to the brand, under the conditions of competent construction of the assortment and the presence of competitive advantages.

Risks or disadvantages of using a differentiated marketing strategy:

– a significant difference in prices is possible, due to which even the unique qualities of the product will not attract a sufficient number of buyers;

– a product may lose its uniqueness when its advantages are copied by cheaper products.

This strategy is used for saturated markets by companies that are ready to make high investments in promotion. There is no need to talk about low cost - it will be higher than the market average. However, this is offset by the ability to sell the product at higher prices.

3. Niche leadership or focus. The strategy involves protection from major competitors and substitute products. Reach high standard In this case, profits are achieved by more effectively meeting the needs of a narrow audience of consumers. This strategy can be based on any type of competitive advantage - the breadth of the offered range or the lower price of the product.

In this case, the company is limited in market share, but it does not need significant investments to develop the product, which is a chance for the survival of small enterprises.

Risks and disadvantages of using a focusing strategy:

– there is a high probability of large differences in product prices compared to leading brands on the market, which can scare away its target audience;

– the attention of large market participants switches to niche segments in which the company operates;

– a serious danger of reducing the difference between the needs of the industry and the niche market.

Where to Use a Niche Leadership Strategy? Working with this strategy is recommended for small companies. It is most effective when the market is saturated, there are strong players, when costs are high or when costs are uncompetitive in comparison with market leaders.

Three stages of service strategy

Stage I. Innovation. When one of the market participants introduces something new in terms of customer service. The company stands out during this period, given the presence of a new competitive advantage.

Stage II. Addiction. The proposed service is becoming familiar to consumers, and an analogue is gradually being introduced in the activities of competitors.

Stage III. Requirement. For consumers, this offer becomes an integral element of a service or product, becoming a standard.

How to check the level of service in your company

• Conducting informal surveys. The CEO and other managers need to understand consumers’ opinions about the proposed service.
• Conducting formal surveys (focus groups). It would be rational to involve both consumers and representatives of all departments of your company for these events.
• Hire outside consultants to survey company employees. With external consultants, the value of the answers increases (with more candid answers).

How to improve the service

Tatiana Grigorenko, managing partner of 4B Solutions, Moscow

Let's consider general tips to improve service in the work of companies.

1. Surprise, influence emotions. Typically, visitors to the office are offered packaged tea or instant coffee. We decided to pleasantly surprise our customers - the visitor is offered a choice of 6 types of professionally prepared coffee, 6 excellent varieties of tea with signature chocolate for dessert.

2. Break the rules. In today's market, it is ineffective to be like everyone else; you need to be better than the rest.

3. Listen to your customers. Do you need to ask your clients what would be of interest to them?

How to create a competitive advantage

When developing a competitive advantage, there are nine criteria for a successful option to consider:

1) Uniqueness.

2) Long-term. Competitive advantage must be of interest for at least three years.

3) Uniqueness.

4) Credibility.

5) Attractiveness.

6) Have ReasonstoBelieve (reason for trust). Specific reasons that will make buyers believe.

7) Be better. Buyers must understand why this product is better than others.

8) Have the opposite. There needs to be a complete opposite in the market. Otherwise it will not be a competitive advantage.

9) Brevity. Must fit into a 30 second sentence.

Step #1. We make a list of all the benefits

Product benefits are sought as follows:

– we ask buyers what competitive advantages they hope to gain from your product;

– make a detailed list of all the properties that the product has, based on the characteristics from the “marketing mix” model:

1) Product

What can you say about the product:

– functionality;

– brand symbols: logo, name, corporate identity;

– appearance: packaging, design;

– required product quality: from the position of the target market;

– service and support;

– assortment, variability.

2) Price

What can you say about the price:

– pricing strategy for entering the market;

– retail price: the selling price of a product must necessarily correlate with the desired retail price, only if the company does not become the last link in the overall distribution chain.

– pricing for different sales channels; different prices are assumed, depending on a specific link in the distribution chain, a specific supplier;

– package pricing: with the simultaneous sale of several company products at special prices;

– policy regarding promotional events;

– availability of seasonal promotions or discounts;

– possibility of price discrimination.

3) Place of sale

It is necessary to have the product on the market in the right place so that the buyer can see it and purchase it at the right time.

What can you say about the sales meta:

– sales markets, or in which the sale of goods is planned;

– distribution channels for selling goods;

– type and conditions of distribution;

– conditions and rules for displaying goods;

– issues of logistics and inventory management.

4) Promotion

Promotion in in this case involves all marketing communications to attract the attention of the target audience to the product, with the formation of knowledge about the product and key properties, creating a need to purchase goods and repeat purchases.

What can you say about promotion:

– promotion strategy: pull or push. The Push strategy involves pushing goods through the trade chain by stimulating intermediaries and sales personnel. Pull – “pulling” products through the distribution chain by stimulating consumers, the final demand of their product;

– target values knowledge, brand loyalty and consumption among its target audience;

– required marketing budget, SOV in the segment;

– geography of your communication;

– communication channels for contact with consumers;

– participation in specialized shows and events;

– media strategy of your brand;

– PR strategy;

– promotions for the coming year, events aimed at stimulating sales.

5) People

– employees who represent your product and company;

– sales personnel in contact with target consumers of the product;

– consumers who are “opinion leaders” in their category;

– manufacturers on whom the quality and price of the product may depend;

– privileged consumer groups also belong to this group, including VIP clients and loyal customers who generate sales for the company.

What can you say about working with people:

– programs to create motivation, with the development of relevant competencies and skills among employees;

– methods of working with people on whom the opinion of the consumer audience depends;

– education and loyalty programs for its sales staff;

– methods for collecting feedback.

6) Process

This one applies to the services market and the B2B market. “Process” refers to the interaction between the company and consumers. It is this interaction that constitutes the basis for purchasing on the market with the formation of consumer loyalty.

• Unique selling proposition: examples, development tips

You can talk about programs to improve the process of providing services to your target clients. The goal is to provide the most comfortable conditions for customers when purchasing and using the proposed service.

7) Physical environment

This also applies to the service and B2B market. This term describes what surrounds the buyer during the purchase of a service.

Step #2: Rank all the benefits

To evaluate the list, a three-point scale of the importance of characteristics is best suited:

1 point - the benefit of this characteristic for target consumers is not valuable;

2 points - the benefit is not primary, which stimulates the purchase of the product in the first place;

3 points - the benefit received is one of the most significant properties of the proposed service.

Step #3. Compare the list of benefits with competitors

The resulting list of characteristics should be compared with your competitors according to two principles: the presence of this property in the competitor, whether the competitor’s condition is better or yours.

Step #4. Seek Absolute Competitive Advantages

Among the sources of absolute competitive advantages, the following should be noted:

– the product is unique due to one or several properties;

– uniqueness in combination of properties;

– special components of the product composition, a unique combination of ingredients;

– certain actions are performed better, more efficiently and quickly;

– features of appearance, shape, packaging, method of sales or delivery;

– creation and implementation of innovations;

– unique technologies, methods for creating a product, patents;

– qualification of personnel and uniqueness of its human capital;

– the ability to provide the minimum cost in your industry, while assuming higher profits;

– special conditions of sales and after-sales service for consumers;

– availability of access to limited raw materials and resources.

Step #5. Look for “false” competitive advantages

First mover. Be the first to announce the properties of competitors’ products, before they have yet communicated them to their target audience;

Performance indicator. Creating your own performance measurement indicator;

Curiosity and interest. You can stand out thanks to a factor that is not considered decisive when purchasing, but will allow you to attract the attention of the target audience.

Step #6. Make a development and control plan

After identifying a competitive advantage, you need to formulate two further plans for marketing actions - a plan for developing your competitive advantage over the next few years and a plan for maintaining the relevance of the presented advantage.

How to Analyze Current Competitive Advantages

Stage 1. Make a list of evaluation parameters

Create a list of key competitive advantages of your product and competitors.

For assessment, a three-point scale is best suited, on which the following are rated:

1 point = the parameter is not fully reflected in the competitive advantages of the product;

2 points = the parameter is not fully reflected in the competitive advantage;

3 points = the parameter is fully reflected.

Stage 3. Make a development plan

Form your action plan aimed at improving the company's competitive advantage. It is necessary to plan improvements on assessment items that received less than three points.

How to develop competitive advantages

Competitive behavior in the market can be of three types:

Creative. Implementation of measures to create new components of market relations to gain a competitive advantage in the market;

Adaptive. Taking into account innovative changes in production, ahead of competitors in terms of modernization of production;

Providing and guaranteeing. The basis is the desire to maintain and stabilize the obtained competitive advantages and market positions in the long term by adding to the range, improving quality, additional services to consumers.

The duration of maintaining competitive advantages depends on:

Source of competitive advantage. Can be a high and low order competitive advantage. The low-order advantage is represented by the possibility of using cheap raw materials, labor, components, materials, fuel and energy resources. At the same time, competitors can easily achieve low-order advantages by copying and searching for their sources of these advantages. The advantage of cheap labor can also lead to negative consequences for the enterprise. With low salaries for repairmen and drivers, they can be lured away by competitors. The advantages of a high order are the excellent reputation of the company, specially trained personnel, and production and technical base.

The number of obvious sources of competitive advantage in the enterprise. The greater number of competitive advantages an enterprise has will more seriously complicate the tasks of its pursuers and competitors;

Constant modernization of production.

How to survive a crisis and maintain a competitive advantage

Alexander Idrisov, managing partner of StrategyPartners, Moscow

1. Keep your finger on the pulse of events. One of the employees should collect and analyze information about the state and trends of the market, how these trends can affect the business, taking into account the study of consumer preferences, demand dynamics, data on investors and competitors.

2. Develop the most pessimistic forecast for your company.

3. Focus on paying customers.

4. Focus on a narrow range of tasks. You need to carefully examine your company's business model. This does not mean that you need to abolish all areas of your activity. But it is worth focusing on a narrow range of tasks, abandoning non-core tasks or areas that can be outsourced.

• Reframing, or How to deal with customer objections

5. Consider merging with competitors. Many companies are now ready for alliances with competitors on mutually beneficial terms.

6. Maintain relationships with potential investors. A particularly important condition during a crisis is that you must not lose contact with investors; it is better to activate them whenever possible.

Information about the author and company

Alexander Maryenko, project manager of the A Dan Dzo group of companies, Moscow. Graduated from the Faculty of Finance of Nizhny Novgorod State University. Participated in projects (more than 10, six of them as a manager) aimed at increasing the profitability of companies' businesses and solving their systemic problems.

John Shoal President of ServiceQualityInstitute, Minneapolis (Minnesota, USA). Considered the founder of service strategy. At the age of 25, he founded a firm specializing in teaching companies about service culture. Author of five best-selling books on the topic of service, translated into 11 languages ​​and sold in more than 40 countries.

ServiceQualityInstitute formed by John Schole in 1972. Specializes in the development and implementation of service strategies in companies. ServiceQualityInstitute specialists have trained more than 2 million people. The main office is located in Minneapolis, branches are located all over the world (in 47 countries), their share is 70% of the total number of representative offices of the company. In Russia, ServiceQualityInstitute and John Shoal are represented by ServiceFirst.

Tatiana Grigorenko, managing partner of 4B Solutions, Moscow.

4B Solutions Company founded in 2004. Provides outsourcing and consulting services. Areas of specialization: improving customer service systems, anti-crisis management, professional legal and accounting support for business. The company's staff is over 20 people. Clients include the Business Aviation Association, Triol Corporation, Rafamet machine tool plant (Poland), ANCS Group, IFR Monitoring, MediaArtsGroup, and the Gaastra boutique chain.

Alexander Idrisov, managing partner of StrategyPartners, Moscow.

StrategyPartners. Field of activity: strategic consulting. Form of organization: LLC. Location: Moscow. Number of personnel: about 100 people. Main clients (completed projects): companies Atlant-M, Atlant Telecom, Vostok, GAZ, MTS, Press House, Razgulay, Rosenergoatom, Russian Machines, Talosto, "Tractor Plants", "Uralsvyazinform", "Tsaritsyno", publishing houses "Prosveshchenie", "Eksmo", Ministry information technologies and communications of the Russian Federation, Ministry of Regional Development of the Russian Federation, Murmansk port, Rosprirodnadzor, administrations of the Arkhangelsk, Nizhny Novgorod, Tomsk regions and Krasnoyarsk Territory, Avantix company.

Today it is no longer enough to create a brand, a strategy for its promotion and development, and work on positioning, hoping for customer loyalty and love for the company. A discerning buyer wants to trust the company. Know that he can give his money and get what he expects without risks. Therefore, it is important for any company to present its competitive advantages to its potential client, showing that it can satisfy his needs. In this article we will talk about what is competitive advantage, why they are needed, what they are and how to find, highlight and group them.

Competitive advantages and benefits: what are they and what are their differences?

The concept of competitive advantage carries the superiority of a company, product, service or brand over other existing market participants - competing companies working with you in the same niche. For a business, competitive advantage helps solve a number of important problems:

• Strengthens the company's position in the market;
• Creates the prospect of stable growth and uninterrupted operations;
• Creates difficulties for competitors entering the market.

But the most important value of competitive advantages is their ability to generate profit for the company. Any company works for profit, for its development and expansion of its customer base. And competitive advantages, like nothing else, help her in this. They become the main motivator for the consumer, pushing him to take the actions that we need.

Advantages and benefits. Same?

Both in marketing and in Internet marketing, you have probably repeatedly encountered the concept of advantages and benefits. When developing a high-quality Landing page, a block with a list of advantages and/or benefits is an obligatory part of the selling strategy and structure. But many business owners perceive the two concepts as equivalent, which is a big mistake.

In terms of their value and impact on the client, the advantages and benefits are identical. They bring the same result. But they differ in meaning, so it is important to understand what, and also know how and when to use them.

Advantages are formed based on the characteristics of a product, service or company as a whole. With their help, the client understands why and how is your company better? and why it's better for him.

Benefits are a derivative of the advantage provided by the characteristic. They help the client solve their problem, make life easier, save time, money, or whatever is relevant to the buyer at the moment.

Despite the fact that the organization's competitive advantages and benefits are different in their specificity, they are united by common requirements. They have to:

• Stand out from competitors;
• Satisfy customer needs;
• To be stable and unchanged in a changing market;
• Be unique and make it clear that no other company will provide such advantages and benefits;
• Work for the profit of the enterprise.

Competitive advantages must be based on the desires of the target buyer, which must be studied. Once the benefits are generated, you can highlight the benefits based on them and demonstrate them to your customer. Let's give an example based on a laptop repair service.

Client's wishes (I WANT):

• I want my laptop to work without crashes and glitches;
• I want my laptop to not slow down or get hot;
• I want to be comfortable working on my laptop.

Client criteria (AS I WANT):

• I want it not to be more expensive than the amount I expect;
• I want my laptop to be repaired in 1-2 days;
• I want original spare parts installed;
• I want to be given a guarantee for repairs of at least 6 months;
• I don't want to go on my own service center.

Based on the analysis of the criteria set by the potential client , we create advantages:

• Laptop repair from 100 UAH;
• Repair time - 1-2 days;
• Installation of original spare parts for Asus, Acer, Samsung. We do not use Chinese analogues or fakes;
• Repair warranty - 12 months;
• Courier delivery of the laptop to the service center and to your hands after its repair.

The benefits have been identified. Let's move on to the benefits:

• Time saving - repairs take only 2 days;
• Saving money - laptop repair will cost 20% less than in other service centers;
• Save effort - the courier will leave the laptop there and back.

Ideally, both advantages and benefits should be stated. Any information affects the conversion of the site, so be sure to work through it and demonstrate it to your buyer.

If you are planning to open a company selling consumer goods that are sold by fifty other companies in your city, and it seems to you that it is impossible to highlight competitive advantages, then you are deeply mistaken. Any company can develop strong benefits that will set it apart from the rest. The main thing is to know how to do it. And we will be happy to tell you this further.

What are the types of competitive advantages?

Competitive advantages can be natural or artificial. Natural benefits state a fact and convey truthful information. Artificial ones belong to the category of manipulation, but can be of great benefit if presented correctly.

What are the natural benefits?

Very often, companies do not demonstrate natural advantages, thinking that they are obvious. And this is a big mistake, since even the most common values ​​among competitors can be presented very powerfully. Below we list what is included in this group.

1. Price/income

Perhaps the most powerful advantage. Especially if competitors don’t have it. But here it is important to format the information correctly. Do not write template phrases: “Low price”, “Discounts for regular customers”, “Wholesale prices”, “Prices from the manufacturer”, etc. Write specifics: “25% discount on refrigerators,” “prices are 30% lower than market prices.” Always speak in numbers. This is very important, especially for B2B companies. Information about earnings also grabs a potential buyer’s attention very well. This is very often used by information businessmen, presenting as an advantage of the service the opportunity for the user to earn money.

2. Timing/energy savings

Your client always wants to save his time. Give him this opportunity by specifying specific deadlines. If your logistics department is well developed and you guarantee fast delivery, write down how many days it will take to deliver the goods from one point to another. Here it is also important to exclude bureaucracy and cliched phrases, such as “Fast delivery.” Write “Delivery in 1 day from Kyiv to Dnepr” or “Delivery in 1 hour to anywhere in the city.” A valuable advantage can be information about benefits that will help the consumer save their effort, energy, time or increase their own productivity (for example, when using the services of a cleaner, the client pays for cleaning and saves his energy by getting cleanliness in his home). Such customer care inspires trust and motivates the consumer to action.

3. Your experience

It is very important here not to cross the fine line by approaching the hackneyed phrase “We are experts in the field...”. Such expressions no longer work and are of no interest to anyone. If you decide to declare your experience, then speak in fact - what you have done in 10 years of your activity: built 150 houses, opened 15 branches throughout the country, introduced a new production line of goods, etc. Your client is looking for facts about your successes, not information about your years of work.

4. Terms of cooperation

Any specific features of cooperation can be an advantage here. Don't be afraid to reveal those that are also listed by your competitors. The fact that you accept cash and non-cash payments can significantly increase the chances of a sale by providing convenience to the buyer. Indicate all the factors of cooperation: the presence of a showroom, the possibility of producing a product model to order, the geographical location of the office near a municipal transport or metro stop. Even the possibility of self-pickup and your own warehouse or any information that gives the client the benefit of saving his time or effort, as a competitive advantage, can play into your hands by providing the buyer with maximum comfort.

5. Achievements

Diplomas, diplomas, certificates, a list of partner companies and large client companies with their logos work as social proof that instills trust in the company, which is the main goal of competitive advantages. With the help of documents that you demonstrate to your potential clients, you will emphasize your experience, status, and authority. And this is very important for buyers, as it says that you are working for the future and development, which means that your company will not close tomorrow.

6. Specialization

If your company operates in a narrow specialization, then you definitely need to tell your client about this. Imagine that you are using an Ariston brand washing machine. And one day it broke for you. Which company will you contact - one that only repairs Ariston washing machines or one that repairs washing machines of all brands? Surely, firstly, because you will subconsciously conclude that its employees are more experienced in matters of your washing machine.

7. Business Features

Any fact specific to your business can become a competitive advantage. Using a certain technology or equipment, an assortment of products that exceeds competitors, purchasing raw materials in Europe - all this will help you become the king. Don't miss this information when creating your benefits.

What advantages can be called artificial?

Such advantages can help out a company that operates in a very popular niche. It is usually very difficult for such firms to find competitive differences, since all organizations most often work according to the same principle. Or the formation of artificial advantages will help a young company that has just entered the market and cannot “compete” with established participants to stand out. Let's list what can serve as such advantages:

1. Added value

Let's say you sell women's dresses. In this niche, it is very difficult to compete with similar companies that may even purchase goods from the same supplier as you. There is a way out - to create added value: to offer your client something that competitors do not offer. For example, when purchasing a dress, an accessory is given as a gift. In other words, even the most ordinary promotion will help you create an advantage over your competitors and attract the attention of buyers.

2. Responsibility for the product/service

It works very well, provided that you are willing to be truly responsible for what you are selling. For example, you claim that the doors you are selling will last 30 years, because you know that they are made of oak without the use of cheap substitutes. Clients will be drawn to you if your statements are compelling.

3. Warranty

Any guarantee will become a competitive advantage if its conditions are met. A guarantee can be given for both the service and the product. For example, you can guarantee the possibility of returning and exchanging goods within 30 days, despite the fact that by law this can only be done within 14 days. Or guarantee a refund if the service does not bring results. Don't worry about customers returning items or asking for refunds frequently. Generally, if the user is not satisfied with the purchase, he forgets about guarantees. But this is not a reason to offer low-quality goods/services in the hope that compensation for them will not be required.

4. Showcasing your offer

If your product or service has no obvious benefits (which is quite common), then you can simply show your potential client what is offered to them in the form of a demo. If this is a product, then you can make a video about it appearance to show a person what he really looks like. If a service is the process of its implementation. Remember, a person perceives 85% of information visually. Therefore, demonstrating your offer will be a significant advantage for your company.

5. Feedback from your clients

It is important that the reviews are real. In this case, they will become social proof, a reason for trust in your company and its activities. They will also create a competitive advantage over other companies. Video reviews where real customers express their opinions about a company, product or service work better. But if this option is difficult to implement, you can use a text review by inserting a phone number, a link to social network or the client’s email address with prior agreement on the publication of his personal data.

6. USP

We will not go into detail about the unique selling proposition and its value, since we have already done that. Let’s just say that with the correct analysis of the business and target audience, as well as the competent construction of the USP, it can become the most powerful advantage of your organization and increase its sales.

Creating competitive advantages: how to turn something “simple” into something “golden”

Before you begin developing a competitive advantage, you need to conduct two critical analyzes - the target audience and competitors.

Target audience analysis

You need to understand who your client is, how old he is, what his social status is. And, most importantly, what problems he wants to solve with the help of your product, service or company as a whole. Problems can be completely different: from the urgent need to buy a product here and now due to lack of time to meeting the requirements for its safety. For example, a person wants to make sure that all tools in your beauty salon are disinfected.

If your target audience consists of several various groups, you need to select one, which your website and development of benefits will be focused on. Ideally, the developed competitive advantages should satisfy the needs, overcome fears and solve problems of the entire target audience, even if it consists of several groups. But sometimes this is impossible to do, so it is advisable to work out competitive advantages for the most important and promising group.

Competitor analysis

Benefits wouldn't be called competitive if they weren't superior to your competitors. When analyzing market participants in your niche, it is important to highlight their strengths and weak sides. Understand their advantages - what they are better than you at. And, conversely, identify their weaknesses, which in the future you can make your superiority over them.

Stages of developing competitive advantages

Once you are already familiar with your target audience and competitors, proceed to the main thing - step by step, work on highlighting the advantages.

Stage 1. Determine all competitive advantages of the company / product / service

Highlight all the benefits that you know. This is very important in order to identify those that will become competitive in the future. If you are determining the benefits of a product or service, you can survey your customers to find out which benefits are most important to them.

Stage 2. Ranking of benefits

Once you have compiled a list of benefits, you need to sift through those that are least important to your consumer and those that are the most important. This is necessary in order to highlight the most valuable factors that will help you develop your business and be able to “overcome” your strong competitors.

Stage 3. Comparison with competing companies

The list of selected benefits must be compared with the benefits of competitors. You need to know which companies have them on the market and which ones they don’t. And also know in what ways they are better and worse.

Stage 4. Highlighting unique advantages

You need to highlight absolute advantages - those that your competitors cannot copy. These are the benefits that are unique to your company, service or product. For example, only your company uses German equipment that allows you to print in a unique format. Or only your company presents the product in a unique limited edition packaging.

Stage 5: Developing False Advantages

It is not always possible to develop natural competitive advantages, especially in very popular and saturated niches. The only way out is to create false advantages.

False advantages are advantages that work on emotions and convince the consumer that your company/product/service is unique. For example, an advertisement for Jacobs coffee claims that it has “aromoxomite magic.” The concept of “aromoxamite” does not exist in nature, but this unique selling proposition of the brand has become its most important advantage.

Stage 6. Development and control

The formation of competitive advantages must end with the development of a plan. You need to think through a strategy on how to develop based on the identified advantages and how to maintain them in the future.

The most common mistakes when developing competitive advantages

A huge number of companies make critical mistakes when creating their advantages, after which, while working, they wonder why they cannot become leaders due to the great competitive pressure. Such errors are so common that they occur all the time. Most often, this is the use of stamps and clericalism. Here are the TOP 6 most common competitive advantages that have long ceased to be them.

We can do what you don't need

Very often, when creating their competitive advantages, companies completely forget about their customers. They talk about what they can offer, forgetting about what their target buyer really needs. As a result, such advantages do not work. They simply do not arouse interest, since a person understands that they will bring him absolutely no benefit.

Advice: When creating advantages, focus on the desires of your buyer, putting your capabilities on the back burner.

We help you increase your profits by 40% with our business plan.

15 years of experience

Almost every company considers it their duty to indicate their work experience. But this information no longer affects the potential client. He doesn't care if you've been in the market for 5, 15, or 30 years without ever going out of business. What matters to him is what you did during this time.

Tip: If you want to indicate your company's experience, be sure to indicate what you have achieved during this time.

Over the 10 years of work of the Gradostroy company, we have built 2 nine-story new buildings, in which 70 families already live.

High level of service/quality

To be honest, your client doesn’t care at all that your company employs certified specialists. The presence of certificates does not affect the quality of service at all. Therefore, the use of template phrases: “We guarantee high level service” or “We provide high quality goods” are just a waste of time.

Tip: Always be specific and qualify your statements. Tell the consumer how he will be provided with a high level of service.

The service station will perform a free diagnosis of your car's automatic transmission and provide a 2-year warranty upon completion of the service.

Individual approach

A boring, hackneyed and annoying phrase that already hurts the eyes and ears. By using this phrase to your advantage, you can be sure that your potential clients won't believe you. At a minimum, because it is used by a dozen more of your competitors and thousands of other companies they have met.

Advice: Never use this unfortunate phrase under any circumstances. If you want to show your buyer that you work for special conditions, say it directly.

You can buy this product to order; we will develop a custom-made layout taking into account your dimensions; We will deliver the goods by courier at a time and place convenient for you.

Affordable prices

Top of all the hyped benefits that companies like to use is the claim of affordable/loyal pricing. Your client will not even perceive this phrase, let alone believe it.

Advice: Give specifics, speak in the language of numbers.

10% cheaper than market prices; 5% discount for each buyer; save 30% when purchasing this set.

A wide range of

And for dessert, a phrase that is sure to loom before your eyes on the website of an online store or in the advertising of any commercial company. This advantage has become so boring and banal that potential clients don’t even realize it.

Tip: If you want to focus on the assortment, talk specifically about the assortment of which product you are talking about.

1000+ models of women's boots made of leather, suede and nubuck.

Your company benefits don't have to be traditional and hackneyed. Try to highlight unique features that can not only attract the reader’s attention, but also motivate them to further action. After all, this is exactly what you expect from your potential client.

Recommendations on how to write competitive advantages and benefits

The best friend of competitive advantage is specificity. Each benefit must be clearly disclosed so that the potential buyer does not invent unnecessary and completely unnecessary things. We will provide recommendations on how to and how not to present the company's advantages and benefits using examples.

Only in fact

Free your client from vague phrases that do not provide value. Always speak accurately and factually.

• We are the best in our niche;
• We sell the highest quality products;
• We cooperate with large companies;
• A wide range - only with us.

• We do not use wet mixtures to reduce the construction time of a house;
• All products have been tested by the sanitary station and comply with GOST standards;
• When purchasing a frying pan, we offer a choice of 10 lid models;
• We cooperate with the network of gas stations “WOG”, “Gefest” and “Parallel”.

Without anonymity

Anonymity is confusing, and understatement only raises doubts. All statements must always be substantiated. Experienced users can easily see through your farce, so provide facts.

• We use the best parts for your car.

• We use new BMW spare parts from the manufacturer.

Only with evidence

Everything is clear here. If the client does not clearly highlight his benefits, then your statements are empty.

• We offer favorable terms of cooperation.

• Save 35% when purchasing cinder blocks in the amount of 20,000 UAH.

Possibility of verification

Your customer must trust you. And trust will not appear out of nowhere. Therefore, give him the opportunity to verify your statements.

• We build modern and comfortable facilities for living.

• You can visit and inspect the facilities built by the company at a time convenient for you.

Focus on target audience

Competitive advantage is not always aimed at all target audience groups. Therefore, it will only be partially beneficial. It is very important to understand who the competitive advantage is intended for, otherwise it will not bring effectiveness.

• The headphones transmit clear sound and do not get tangled in your pocket.

• The sensitivity of Earpods is 113 dB, which allows for accurate sound reproduction for sound engineers. Frequency range - 8 - 27000 Hz, which will allow you to enjoy crisp, deep bass and crystal clear high frequencies without distortion;
• The fabric braid prevents the headphones from getting tangled in your pocket, and you won’t waste time untangling them.

It's important to demonstrate true benefits. Otherwise, fictitious facts will only cause a negative impression of the company or product in the buyer, and he will go to your competitors.

We learn to develop a company's competitive advantages based on its shortcomings

Not all companies, especially young ones that are just entering the market, can compete with their competitors. To stay afloat, they have to inflate prices and extend delivery times due to the logistics department not yet being fully formed. All this can negatively affect the business, driving away customers. After all, no one wants to pay more or wait longer for their order when competitors have everything much cheaper and faster.

But there are special tricks that help turn disadvantages into advantages. These are facts that become a counterbalance to your weak points. Let's give specific examples.

Inconvenient office location, far from the center	The company's office has a showroom where you can see the product live. The warehouse is located on site. There is convenient parking, including for trucks. Pickup and delivery available throughout the city.
The price is significantly higher than in competing stores	Yes, but the package includes additional “goodies”: updated to latest version operating system, case, headphones and protective glass as a gift.
Long delivery on order	It is possible to order spare parts from the manufacturer without intermediaries. It is possible to order rare spare parts.
Young company with no work experience	Sending goods on the day of order by Ukrposhta, Nova Poshta, Intime or Deliveri, free consultations, no prepayment.
Very small selection of products	Narrow specialization on a specific brand. Detailed consultation on the specifics of the product.

As you can see, even those shortcomings that can lead a company to failure can become powerful competitive advantages that even established companies in the market cannot provide.

Examples of competitive advantages in different areas of the company’s business

In theory, developing competitive advantages for companies in the retail sector is much easier than for those involved in more specialized businesses. Therefore, we will provide specific examples for some niches that can become inspiration for you and the basis for your ideas.

Benefits for tourism business

1. Tours to remote corners of the planet;
2. Discounts on last minute travel packages up to 80%;
3. Free guide;
4. Free transfer by luxury car;
5. Gifts from the tour operator when ordering certain tours.

Benefits for a law firm

1. Specialization;
2. Availability of lawyers, notaries and other highly specialized specialists;
3. Geographical location of the office;
4. Free online consultation;
5. The company has 15 years of experience and 98% of successfully completed cases in favor of the plaintiff.

Benefits for the transport company

1. Own fleet of vehicles with different tonnage;
2. Free delivery and cargo tracking for orders over a certain amount;
3. Built-in navigation in the car and the ability to track its location;
4. Responsibility for the condition of the cargo upon arrival;
5. Official cooperation agreement.

Benefits for a cleaning company

1. Cooperation by agreement. Full responsibility for the result;
2. Cleaning is performed using professional equipment using sulfate-free detergents;
3. Financial responsibility for the condition of expensive interior items;
4. Financial responsibility for the safety of material assets;
5. Working with complex contaminants.

Brand value development

Brand value is not only the positive characteristics and quality of the product. These are the emotions and associations that a name evokes in a potential buyer, allowing him to be confident in himself and in the company. When a brand becomes famous and wins love, it becomes the strongest motivator for a person to take action. Logically, if we know that a particular brand of toothpaste will help reduce tooth sensitivity, then we will choose it, and not any other, whose advertising announces a similar feature of the product.

How to develop brand value?

There are many ways to create brand value and further develop it. But, first of all, it is necessary to analyze the target audience, its needs and desires. You need to understand what is most important and valuable to them, so that you can focus on this when forming values. Once the target audience has been analyzed, you can use one of the following methods for forming and developing values.

Value+benefit

It is very effective to present to the buyer not only the value, but also the clear benefit that the brand will provide him. For example, Head&Shoulders shampoo for women not only creates hair volume, but also eliminates dandruff. This means that girls using shampoo from this brand will get clean hair, voluminous hairstyle and self-confidence due to the absence of dandruff. The important thing to note here is that the benefits are real and the brand actually lives up to its claims.

Establishing Expectations

Brand values ​​can be developed based on the formation of some expectations. At the same time, a person subconsciously creates for himself a certain picture, image and feelings that he expects to receive using the brand. Even if the actual result is not as powerful as expected, the consumer will experience it to the maximum, since he has already convinced himself of it. For example, the slogan of the energy drink Red Bull: “Red Bull gives you wings.” This does not mean that a person will be able to fly. But he makes it clear that the charge of energy that he will receive after drinking the drink will allow him to feel a significant surge of strength.

Help effect

This method involves creating conditions under which the consumer participates in solving any problems. For example, the McDonald's company periodically organizes promotions to help orphans. When ordering fast food, the client is given a sticker in the shape of a palm, where he indicates his name. Thus, he is made to understand that with his purchase he gave part of the money to help those in need this children.

Creation of Alter Ego

Some brands demonstrate their value in their ability to create an alter ego in the customer. A person gets the feeling that by using this particular brand, he is able to do something that he would not have dared to do before. Such brands very often work to provoke. This method is often used by fashion brands. Or for perfumes. For example, Ax deodorant for men is positioned as a way to reveal your sexuality and attract the attention of women.

Brand equity works very well for the future of the company as a whole. With the correct development of value, the company will receive stable growth and a constant increase in consumers thanks to the effective positioning of its brand.

Developing benefits and creating product value

Competing on product benefits is not always possible, especially if the product is in a very common niche. However, if your company is a manufacturer or you are the first to bring a product to the market, then you have every chance of becoming a leader.

But do not forget that your competitors are not asleep, and after some time they will present consumers with a similar product. Therefore, it is very important to develop absolute advantages that competitors cannot take from you. And, first of all, it is necessary to analyze the target audience, identifying their desires and needs. Based on the resulting portrait of the target consumer, formulate the advantages of the product. It could be:

• Low price compared to competitors;
• A unique product due to one, several or multiple properties;
• Unique composition or use of very rare ingredients;
• A special type, shape, volume or packaging of goods;
• The product is more effective compared to analogues;
• You, as a manufacturer, create an innovative product;
• The product is sold under special conditions.

When you become an innovator by introducing a completely new product concept to the market, you can create value. With its help, the recognition of your product and, consequently, its sales will increase. For example, Apple company By releasing the IPhone, it announced an absolute innovation in the field of smartphones - a unique operating system, unique processors. This became the main value of the product at the stage of its introduction to the market.

Each developed benefit of a product must provide benefits to the consumer. That is why it is important to know what exactly your target audience wants to get when purchasing a product.

Advantages of a product/service as an emotional component

The sale of a product or service carries with it the most important goal in terms of its consumption or use - to satisfy the buyer's main need. A person purchasing something from your store wants positive changes to occur in his life with their help. He wants to get something, become someone, or avoid something that might bring him discomfort.

Therefore, first of all, the key advantage of a product is its ability to satisfy the desires and emotions of the buyer. Agree, you visit the hairdresser once a month not to get a haircut, but to look more attractive and more confident after the hairdresser’s service.

Marketers and specialists in the promotion of goods and services identify 7 areas, one of which is a powerful motivator for the purchase of a particular product/service, depending on its specifics. Let's look at each and give specific examples.

Money

The client/buyer wants to make a profit or not lose it.

We save your money when promoting using an SEO audit for website development

By ordering a service, the client will certainly avoid all sorts of mistakes in website development that will negatively affect promotion. Result: saving money on updating the site and eliminating errors.

Energy/time

When purchasing a product or ordering a service, a person’s goal may be urgency in saving time or effort: to make work easier or faster, to increase your personal productivity.

Lose weight without leaving your favorite couch

Preparations based on natural ingredients will help you lose weight and find the figure of your dreams, without wasting your energy and time on trips to the Gym and grueling workouts.

Health/Beauty

An important motivation for purchasing a product or ordering a service may be the desire to improve your health or the health of a loved one, get rid of illness/pain, or maintain your health at a certain level.

This remedy is your self-confidence

With this line of cosmetic care products problem skin, you will get rid of imperfections on the skin, eliminate oily shine. As a result you will get healthy skin and self-confidence and attractiveness.

Status/Affiliation

When purchasing goods and services, a person may have the goal of emphasizing with their help his individuality, taste, or attributing him to any group or, conversely, highlighting him.

You are unique in this dress

By purchasing a one-of-a-kind couture dress, you focus on your personality and individuality. Make a statement by letting others know that you are an independent woman.

Safety comes first

With our “Cuckoo” alarm you will increase the safety of your private property, life and health.

Recognition/compensation

The motivation for purchasing a product or service may be the desire to receive confirmation of its value or to avoid criticism.

Not one price is the same or how to develop a competitive advantage of a product without affecting the issue of its cost

Many entrepreneurs are confident that the only and most powerful competitive advantage of their product can be price. If the price of the product is lower than that of competitors, then your company will instantly receive an increase in profits. And this is quite possible. But the company cannot always reduce the price due to the expected damage. And clients are not always only interested in price.

Let's consider what characteristics of the product can be used to form its advantages and benefits for the buyer.

Features of the product itself

The unique characteristics of the product will create its competitive advantage. They can become the main motivator for purchase, even if the product is more expensive than your competitors. The advantages may include:

• Functionality;
• Corporate identity, symbols, logo;
• Appearance;
• Range;
• No need for maintenance;
• Superiority in quality.

Place of sale of goods

Significant advantages for the product will be:

• Location of the point of sale of goods;
• Product availability;
• Display of goods;
• Ease of access to the product.

Staff and people

It may be important for the consumer who represents the product, and when demonstrating the advantages in this category, they become a powerful motivator for purchase. These benefits may include:

• Company employees who provide free advice on product characteristics;
• Store personnel who are ready to recommend or consult about a product;
• Manufacturer, whose name characterizes the quality of the product;
• Public figures advertising a product.

Is it always necessary to demonstrate competitive advantages and benefits?

In the framework of fierce market competition, demonstrating to consumers the advantages of a company, product or service and the benefits that they will receive as a result, becomes almost the only way to promote your business and work for the future. This is a fairly simple option for promoting and positioning your name, which does not require financial investments, but at the same time is an effective tool for competing. Therefore, do not ignore our recommendations, work on your competitive advantages in order to soon take a leadership position in your niche.