Advantages of the enterprise over competitors. Coursework: Competitive advantages of the enterprise

On international market Firms compete, not countries. It is necessary to understand how a firm creates and maintains competitive advantage in order to understand the country's role in this process. At the present stage, the competitive capabilities of firms are not limited by the boundaries of their home country. The role of global strategies in creating competitive advantage should be given special attention, as these strategies completely change the role of the home country.

Let's start with the basic principles of competitive strategy. In competition in the domestic and international markets, many principles coincide. We then look at ways to enhance competitive advantage through global competition.

Competitive strategy

To understand the nature of competition, the basic unit is the industry (whether processing or from the service sector), that is, a group of competitors that produce goods or services and directly compete with each other. A strategically significant industry includes products with similar sources of competitive advantage. Examples of this are facsimile, polyethylene, heavy haul trucks and plastic injection molding equipment. In addition, there may be related industries whose products have the same buyers, production technology or distribution channels, but they impose their own requirements for competitive advantage. In practice, the boundaries between industries are always very vague.

In many discussions about trade and competition, too general definitions of industries are used, such as "banking", "chemicals" or "engineering". This is a very broad approach, as both the nature of competition and the sources of competitive advantage vary considerably within each such group. For example, mechanical engineering is not a single industry, but dozens of industries with different strategies, such as the production of equipment for the weaving industry, for the manufacture of rubber products or for printing, and each has its own special requirements for achieving a competitive advantage.

By developing a competitive strategy, firms seek to find and implement a way to compete profitably and in the long term in their industry. There is no universal competitive strategy; only a strategy that is consistent with the conditions of a particular industry, the skills and capital that a particular firm has, can bring success.

The choice of a competitive strategy is determined by two main points. The first is the structure of the industry in which the firm operates. The essence of competition in different industries varies greatly, and the likelihood of long-term profits in different industries is not the same. For example, the average profitability in the pharmaceutical and cosmetics industries is very high, but not in steel and many types of clothing. The second main point is the position that the firm occupies within the industry. Some positions are more profitable than others, regardless of the average profitability of the industry as such.

Each of these moments in itself is not enough for choosing a strategy. Thus, a firm in a very profitable industry may not make much profit if it chooses the wrong position in the industry. Both the structure of the industry and the position in it can change. An industry can become more (or less) “attractive” over time as the country's conditions for creating that industry or other elements of the industry's structure change. Position in the industry - a reflection of the endless war of competitors.

The firm can influence both the structure of the industry and the position in its “table of ranks”. Firms that are doing well not only respond to changes in the "environment", but also try to change it to their own advantage. A significant change in the competitive position entails changes in the structure of the industry or the emergence of new foundations for competitive advantage. Thus, Japanese firms that produce televisions have become world leaders due to the trend towards compact, portable televisions and the replacement of the lamp element base with a semiconductor one. Firms in one country take over the lead from firms in another country if they are better able to respond to such changes.

Structural analysis of industries

Competitive strategy must be based on a comprehensive understanding of the structure of the industry and the process of its change. In any sector of the economy - it does not matter whether it operates only in the domestic market or in the external one too - the essence of competition is expressed by five forces: 1) the threat of the emergence of new competitors; 2) the threat of the appearance of goods or services - substitutes; 3) the ability of suppliers of components, etc. to bargain; 4) the ability of buyers to bargain; 5) rivalry between existing competitors (see Figure 1).

Picture 1. The Five Forces That Determine Industry Competition

The significance of each of the five forces varies from industry to industry and ultimately determines the profitability of industries. In industries where these forces operate favorably (say, soft drinks, industrial computers, software, pharmaceuticals, or cosmetics), multiple competitors can earn high returns on capital invested. In the same industries where one or more forces act unfavorably (for example, in the production of rubber, aluminum, many metal products, semiconductor devices and personal computers), very few firms manage to maintain high profits for a long time.

The five forces of competition determine the profitability of an industry because they influence the prices firms can charge, the costs they must incur, and the amount of capital investment required to compete in the industry. The threat of new competitors reduces the overall profitability potential of the industry because they bring new manufacturing capacity into the industry and seek market share, thereby reducing positional profits. Powerful buyers or suppliers, by bargaining, benefit and reduce the firm's profits. Fierce competition in the industry reduces profitability, because in order to remain competitive, you have to pay (expenses for advertising, marketing, research and development (R&D), or profit "leaks" to the buyer due to lower prices.

The availability of substitute products limits the price that firms competing in the industry can charge; higher prices will encourage buyers to look for a substitute and reduce industry output.

The significance of each of the five forces of competition is determined by the structure of the industry, that is, its main economic and technical characteristics. For example, buyer impact is a reflection of questions such as: how many buyers does the firm have; what part of the sales volume is accounted for by one buyer; Is the price of the product a significant part of the buyer's total cost (making the product "price sensitive")? The threat of new competitors depends on how difficult it is for a new competitor to “infiltrate” an industry (determined by indicators such as brand loyalty, the size of the economy, and the need to connect to a network of intermediaries).

Each branch of the economy is unique and has its own structure. For example, it is difficult for a new competitor to infiltrate the pharmaceutical industry, since it requires huge R&D expenditures and a large-scale economy when selling products to doctors. It takes a long time to develop a substitute for an effective drug, and buyers at any time are not afraid of high prices. The influence of suppliers is not significant. Finally, rivalry between competitors has been, and remains, moderate and focused not on price-cutting, which drives down industry-wide profits, but on other variables, such as R&D, that boost industry-wide output. The presence of patents also discourages those who intend to compete by copying someone else's product. The structure of the pharmaceutical industry provides some of the highest returns on capital investment in major industries.

The structure of the industry is relatively stable but can still change over time. For example, the consolidation of distribution channels that is taking place in several European countries increases buyer power. Through their strategy, firms can also change all five forces in one direction or another. For example, the introduction of computer information systems makes it difficult for new competitors to emerge, because such a system costs hundreds of millions of dollars.

Industry structure is important to international competition for a number of reasons. First, given the different structure in different industries, different requirements must be met in order to compete successfully. Competing in an industry as fragmented as apparel requires very different resources and skills than aircraft manufacturing. The conditions in the country for competition are more favorable in some industries than in others.

Secondly, often the sectors that are important for a high standard of living are those that have an attractive structure. Industries with an attractive structure and with affordable conditions for new competitors (in terms of technology, specialized skills, access to distribution channels, brand reputation, etc.) are often associated with high labor productivity and provide a large return on invested capital. Standard of living in to no small extent depends on the ability of the country's firms to successfully enter industries with a profitable structure. Reliable indicators of the "attractiveness" of an industry are not scale, growth rate, or newness of technology (traits often emphasized by businessmen or government planners), but the structure of the industry. By targeting structurally disadvantaged industries, developing countries often misuse resources they don't have much of.

Finally, another reason for the importance of industry structure in international competition is that changing structure creates real opportunities for a country to enter new industries. Thus, Japanese firms producing copiers began to successfully compete with the American leaders in this field (specifically, Xerox and IBM) due to the fact that they turned to a market sector left almost without attention (small-sized copiers), applied a new approach to the buyer (selling through dealers instead of direct sale), changed production (mass production instead of small-scale production) and pricing approach (selling instead of renting, which is expensive for the customer). This new strategy has eased entry into the industry and eroded the edge of the former leader. How domestic conditions point the way or force firms to recognize and respond to changes in structure is critical to understanding "patterns of success" in international competition.

Position in the industry

Firms must not only respond to changes in the structure of the industry and try to change it in their favor, but also choose a position within the industry. This concept includes the approach of the firm as a whole to competition. For example, in the production of chocolate, American firms (Hershey, M & M "s / Mars, etc.) compete due to the fact that they produce and sell in huge quantities a relatively small set of chocolate varieties. In contrast, Swiss firms (Lindt, Sprungli, Tobler / Jacobs and etc.) sell mostly refined and expensive products through narrower and more specialized distribution channels They produce hundreds of items, use the highest quality components and have a longer manufacturing process As this example shows, position in an industry is the firm's overall approach to competition , and not just its products or who it is designed for.

Position in the industry is determined by competitive advantage. Ultimately, firms outperform their rivals if they have a strong competitive advantage. Competitive advantage 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 its competitors. Selling goods at the same (or approximately the same) price as competitors, the company in this case receives a large profit. Thus, Korean firms producing steel and semiconductor devices won over foreign competitors in this way. They produce comparable goods at very low cost, using a low-paid but highly productive labor force and modern technology and equipment purchased abroad or manufactured under license.

Differentiation is the ability to provide the customer with a unique and greater value in the form of a new product quality, special consumer properties or after-sales service. For example, German machine tool firms compete using a differentiation strategy based on high technical specifications products, reliability and fast maintenance. Differentiation allows the firm to dictate high prices, which, at equal costs with competitors, again gives a large profit.

Competitive advantage of any type gives higher productivity than competitors. A firm with a low cost of production produces a given value at a lower cost than competitors; a firm with a differentiated product has a higher profit per unit of output than its competitors. Thus, competitive advantage is directly related to the formation of national income.

Difficult, but still possible to gain a competitive advantage based on both lower costs and differentiation6. It is difficult to do this because the provision of very high consumer properties, quality or excellent service inevitably leads to a rise in the cost of goods; it will cost more than if you just strive to be at the level of competitors. Of course, firms can improve technology or production methods in ways that both reduce costs and increase differentiation, but ultimately competitors will do the same and force the decision on what type of competitive advantage to focus on.

However, any effective strategy must pay attention to both types of competitive advantage, albeit strictly adhering to one of them. A firm that focuses on low costs must still provide acceptable quality and service. In the same way, the product of a firm that produces differentiated products should not be so expensive as the products of competitors that it would be to the detriment of the firm.

Another important variable that determines position in an industry is the scope of competition, or the breadth of purpose a firm has within its industry. The firm must decide for itself how many varieties of products it will produce, what distribution channels it will use, what customer base it will serve, in what parts of the world it will sell its products, and in what related industries it will compete.

One of the reasons for the importance of the sphere of competition is that industries are segmented. Almost every industry has well-defined product varieties, multiple distribution and distribution channels, and multiple types of buyers. Segmentation is important because there are different demands in different market sectors: an ordinary men's shirt sold without any advertising, and a shirt created by a well-known fashion designer, are designed for buyers with very different needs and criteria. In both cases, we have shirts, but each has its own type of buyer. Different market sectors require different strategies and different abilities; accordingly, the sources of competitive advantage in different market sectors are also very different, although these sectors are “served” by the same industry. And the situation when firms in one country are successful in one sector of the market (for example, Taiwanese firms in the production of cheap leather shoes), and firms in another country in the same industry in another sector (Italian firms in the production of model leather shoes) is not rarity.

The scope of competition is also important because firms can sometimes gain a competitive advantage by setting large goals by competing globally, or by leveraging industry links by competing in related industries. For example, Sony is greatly benefiting from the fact that a wide variety of radio-electronic products are produced around the world with its brand, using its technology and distributed through its channels. Relationships between well-defined industries arise from the commonality of important activities or skills among firms that compete in those industries. The sources of competitive advantage worldwide will be discussed below.

Firms in the same industry may choose different areas of competition. Moreover, it is typical that firms from different countries in the same industry choose different areas of competition. Basically, the choice is: compete on a "broad front" or aim at any one sector of the market. Thus, in the production of packaging equipment, German firms offer equipment lines for a wide range of purposes, while Italian firms strive to focus on highly specialized equipment used only in certain market sectors. In the automotive industry, leading American and Japanese firms produce a whole range of cars of various classes, while BMW and Daimler-Benz (Germany) primarily produce powerful, high-speed and expensive high-class cars and sports cars, while Korean companies Hyundai and Daewoo have concentrated on machines of small and ultra-small class.

The type of competitive advantage and the area in which it is achieved can be combined into the concept of typical strategies, that is, completely different approaches to what high performance in an industry is. Each of these archetypal strategies depicted in Figure 2 represents a fundamentally different concept of how to compete and succeed in competition. For example, in shipbuilding, Japanese firms have adopted a strategy of differentiation and offer a wide range of high quality vessels at high prices. Korean shipbuilding firms have chosen a strategy of cost leadership and also offer a variety of types of ships, but not the highest, but simply good quality; however, the cost of Korean ships is less than Japanese ones. The strategy of successful Scandinavian shipyards is focused differentiation: they build mainly specialized types of ships, such as icebreakers or cruise ships. They are made using specialized technology and are sold at a very high price to justify the cost of labor, which is highly valued in the Scandinavian countries. Finally, Chinese shipbuilders, who have recently become actively competitive in the world market (strategy - focusing on the level of costs), offer relatively simple and standard ships at even lower costs and at even lower prices than Korean ones.

Figure 2. Model Strategies

Using the example of typical strategies, it becomes clear that no strategy is suitable for absolutely all industries. On the contrary, in many industries, several strategies are perfectly combined. Moreover, the structure of the industry limits the choice options strategy, but you will not find an industry in which only one strategy can bring success. In addition, variants of typical strategies with different ways of differentiation or focusing are possible.

The concept of model strategies is based on the idea that each of them is based on competitive advantage and that in order to achieve it, the firm must choose its strategy. The firm must decide what type of competitive advantage it wants to gain and in what area it is possible.

The biggest strategic mistake is the desire to "chase all the hares", that is, to use all competitive strategies at the same time. This Right way to strategic mediocrity and poor performance, because a firm that tries to use all strategies at the same time will not be able to properly use any of them due to their "built-in" contradictions. An example of this is the same shipbuilding: Spanish and British shipbuilding companies are in decline, because the costs of their products are higher than those of the Koreans, they have no basis for differentiation compared to the Japanese (that is, they do not produce anything that the Japanese would not produce ), but they could not find any market segments where they could gain a competitive advantage (like Finland in the icebreaker market). Thus, they do not have a competitive advantage, and they are mainly supported by government orders.

Sources of Competitive Advantage

Competitive advantage is achieved based on how the firm organizes and performs certain activities. The actions of any firm are divided into different types. For example, salespeople make phone calls, service technicians make repairs at the customer's request, scientists in a laboratory develop new products or processes, and financiers raise capital.

Through these activities, firms create value for their customers. The ultimate value created by a firm is determined by how much customers are willing to pay for the goods or services offered by the firm. If this amount exceeds the total costs of all necessary activities, the firm is profitable. To gain a competitive advantage, a firm must either provide customers with about the same value as its competitors, but produce a product at a lower cost (lower cost strategy), or act in such a way as to give customers a product with more value, for which you can get a higher price ( differentiation strategy).

Competitive activities in any given industry can be categorized as shown in Figure 3. They are grouped in what is known as a value chain. All activities in the value chain contribute to use value. They can be roughly divided into two categories: primary activities (permanent production, marketing, delivery and service of goods) and secondary activities (providing production components, such as: technology, human resources, etc., or providing infrastructure functions to support other activities ), i.e. supporting activity. Each activity requires purchased "components", human resources, a combination of certain technologies, and is based on the infrastructure of the company, such as management and financial activities.

The competitive strategy chosen by the firm determines the way in which the firm performs individual activities and the entire value chain. In different industries specific types activities have different implications for achieving competitive advantage. Thus, in the production of printing presses, the development of technology, build quality and after-sales service are indispensable for success; in the production of detergents, advertising plays a major role, since the manufacturing process is simple here, and there is no question of after-sales service.

Firms gain competitive advantage by developing new ways of doing things, introducing new technologies or inputs. For example, the Japanese firm Makita has emerged as a leader in power tool manufacturing by using new, cheaper materials and selling standard tool models from a single factory in the world. Swiss chocolate companies have achieved worldwide recognition as the first to introduce a number of new recipes (including creamy chocolate) and apply new technologies (for example, continuous mixing of chocolate mass), which significantly improved the quality finished products.

Figure 3 Value chain

But a firm is not only the sum of all its activities. A firm's value chain is a system of interdependent activities with links between them. These links occur when the method of one activity affects the cost or efficiency of others. Relationships often result in additional costs for "fitting" certain types activities to each other pay off in the future. For example, more expensive designs and components or more stringent quality control can reduce after-sales service costs. Firms must incur such costs in accordance with their strategy in the name of competitive advantage.

The presence of links also requires the coordination of different types of activities. In order not to disrupt the delivery time, for example, it is necessary that production, ensuring the supply of raw materials and components, auxiliary activities (for example, commissioning works) were well matched. A clear coordination ensures the timely delivery of goods to the customer without the need to have expensive means of delivery (that is, a large fleet of vehicles when you can do with a small one, etc.). Aligning related activities reduces transaction costs, provides clearer information (which makes management easier), and allows costly transactions in one activity to be replaced by cheaper transactions in another. It is also a powerful way to reduce the overall time required to complete different activities, which is increasingly important for competitive advantage. For example, such coordination significantly reduces the time for developing and launching new products, as well as taking orders and delivering goods.

Careful relationship management can be a critical source of competitive advantage. Many of these connections are subtle and may not be noticed by competing firms. Benefiting from these ties requires both complex organizational procedures and the adoption of compromise decisions in the name of future benefits, including in cases where organizational lines do not cross (such cases are rare). Japanese firms have been particularly good at link management. With their filing, the practice of mutual “overlapping” the stages of new product development in order to simplify their release and reduce development time, as well as enhanced quality control “on stream” to reduce after-sales service costs, became popular.

To achieve competitive advantage, you should approach the value chain as a system, not as a set of components. Changing the value chain by rearranging, regrouping, or even eliminating certain activities from it often leads to a significant improvement in competitive position. An example of this is the production of household appliances. Italian firms in this area completely changed the manufacturing process and used a completely new distribution channel, thanks to which they became world export leaders in the 1960s and 1970s. Japanese firms for the production of photographic equipment have become world leaders by putting single-lens reflex cameras on stream, introducing automated mass production and for the first time in the world setting up mass sales of such cameras.

The value chain of an individual firm, applied when competing in this industry, is included in more major system activity, which can be called a value system (see Figure 4). It includes suppliers of raw materials, components, equipment and services. On the way to the final consumer, the company's product often passes through the value chain of distribution channels. Ultimately, the product becomes an aggregate element in the value chain of the customer who uses it to carry out their business.

Figure 4 Value system

Competitive advantage is increasingly determined by how well a firm can organize this entire system. The above links not only connect different types of activities of the company, but also determine the mutual dependence of the company, subcontractors and distribution channels. A firm can gain a competitive advantage by better organizing these connections. Regular and timely deliveries (a practice first introduced in Japan and called "kenban" there) can reduce a firm's operating costs and allow it to reduce inventory levels. However, the potential for savings through linkages is by no means limited to securing deliveries and taking orders; it also includes R&D, after-sales service and many other activities. The firm itself, its subcontractors, and the distribution network can benefit if they can recognize and exploit such links. The ability of firms in a given country to use links with suppliers and buyers in their country explains in no small measure the competitive position of the country in the corresponding industry.

The value chain provides a better understanding of the sources of cost gains. The cost benefit is determined by the size of the costs in the entire necessary activities(compared to competitors) and can occur at any stage. Many managers look at costs too narrowly, focusing on the production process. However, firms that lead by reducing costs also win by developing new, cheaper products, using less expensive marketing, reducing service costs, that is, extracting cost benefits from all links in the value chain. In addition, in order to obtain a cost benefit, careful “adjustment” is most often required not only for relationships with suppliers and the distribution network, but also within the company.

The value chain also helps to understand the scope for differentiation. A firm creates special value for the buyer (and this is the meaning of differentiation) if it gives the buyer such savings or such use properties that he cannot get by buying a competitor's product. In essence, differentiation is the result of how a product, ancillary services, or other activities of the firm affect the activities of the buyer. A firm and its customers have many points of contact, each of which can be a source of differentiation. The most obvious of them shows how the product affects the activity of the buyer in which this product is used (say, a computer used to take orders, or a laundry detergent). Creating additional value at this level can be called first-order differentiation. But almost all products have a much more complex effect on buyers. Thus, a structural element included in a product purchased by the customer must be credited and - in the event of a failure in the entire product - repaired as part of the product sold to the end customer. At each stage of this indirect influence of the product on the activity of the buyer, new opportunities for differentiation open up. In addition, almost all activities of the company in one way or another affect the buyer. For example, the developers of an affiliated company can help to build a component product into final product. Such high-order relationships between the firm and customers are another potential source of differentiation.

Different industries have different bases for differentiation, and this is of great importance for the competitive advantage of countries. There are several distinct types of firm-client relationships, and firms in different countries use different approaches to improve them. Swedish, German and Swiss firms often succeed in industries that require close cooperation with customers and high demands on after-sales service. In contrast, Japanese and American firms thrive where the product is more standardized.

The concept of the value chain allows for a better understanding of not only the types of competitive advantage, but also the role of competition in achieving it. The scope of competition is important because it determines the direction of the firm, the way in which those activities are carried out, and the configuration of the value chain. Thus, by choosing a narrow target market segment, a firm can fine-tune its activities to the requirements of this segment and thereby potentially gain cost benefits or differentiation compared to competitors operating in a broader market. At the same time, aiming at a broad market can provide a competitive advantage if the firm is able to operate in different segments of the industry or even in several interconnected industries. Thus, German chemical companies (BASF, Bayer, Hoechst, etc.) compete in the production of the most diverse chemical products, but separate groups of products are produced at the same plants and have common distribution channels. Likewise, Japanese manufacturing firms consumer electronics Companies such as Sony, Matsushita, and Toshiba benefit from their sister industries (TV, audio, and VCR). They use the same brand names, worldwide distribution channels, common technology and joint purchasing for these products.

An important reason for competitive advantage is that the firm chooses a field of competition that is different from that chosen by competitors (other market segment, region of the world), or by combining products of related industries. For example, Swiss hearing aid firms have focused on high power hearing aids for people with severe hearing impairments, outperforming broader American and Danish competitors. Another common technique for increasing competitive advantage is to be among the first firms to move to global competition while other domestic firms are still limited to the domestic market. The home country plays an important role in how these competitive differences manifest themselves.

Firms achieve competitive advantage by finding new ways to compete in their industry and entering the market with them, which can be summed up in one word - "innovation". Innovation in a broad sense includes both the improvement of technology and the improvement of the ways and methods of doing business. Specifically, the update can be expressed in a change in the product or production process, new approaches to marketing, new ways of distributing the product and new concepts of the competition sphere. Innovative firms not only seize the opportunity for change, but also make it happen faster. Strictly speaking, most of the changes are evolutionary, not radical; often the accumulation of small changes yields more than a major technological breakthrough. Moreover, the truth is often confirmed that “the new is the well-forgotten old”: many new ideas are not really so new, they just have not been developed properly. Innovation is equally the result of improved organizational structure and R&D. It always involves an investment in skills and knowledge, and most often in fixed assets and additional marketing efforts.

Innovation leads to a change in competitive leadership if other competitors either have not yet recognized the new way of doing business, or are unable or unwilling to change their approach. There are many reasons for this: complacency and complacency, inertia of thinking (a wary attitude towards the new), funds invested in specialized funds and equipment (this “ties hands”), and, finally, there may be “mixed” motives. It was precisely such “mixed” motives that Swiss watch companies had, for example, when the American company Timex threw cheap watches onto the market that could not be repaired, and the Swiss were all afraid to undermine the image of their watches as an equivalent of quality and reliability. In addition, their factories turned out to be completely unsuitable for the mass production of cheap products. However, without a new approach to competition, the challenger rarely succeeds (unless he changes the very nature of competition). Established leaders will most often retaliate immediately and "avenge themselves."

In the international market, innovations that provide a competitive advantage anticipate new needs both at home and abroad. Thus, with the growing global concern for product safety, the Swedish firms Volvo, Atlas Copco, AGA and others have succeeded because they foresaw this development in advance. However, innovations undertaken in response to a situation specific to the domestic market can have the opposite effect of what is desired - to push back the country's success in the international market!

Opportunities for new ways to compete usually stem from some kind of “gap” or change in industry structure. And it so happened that the opportunities that appeared with such changes remained unnoticed for a long time.

Here are the most typical reasons for innovations that give a competitive advantage:

1. New technologies. Changing technology can create new opportunities for product development, new ways to market, manufacture or deliver, and improve related services. It is this that most often precedes strategically important innovations. New industries emerge when a change in technology makes a new product possible. Thus, German firms became the first in the X-ray equipment market, because X-rays were discovered in Germany. Leadership shifts are most likely to occur in industries where abrupt change in technology obsoletes the knowledge and funds of former leaders in the industry. For example, in the same X-ray and other types of medical equipment for such purposes (tomographs, etc.), Japanese firms overtook German and American competitors thanks to the emergence of new technologies based on electronics, which made it possible to replace traditional x-rays.

Firms rooted in old technology find it difficult to understand the meaning of a new emerging technology, and even more difficult to respond to it. So, the leading American firms that produced radio tubes - RCA, General Electric, GTE-Sylvania - were involved in the production of semiconductor devices, and all to no avail! The same firms that started manufacturing semiconductor devices from scratch (for example, Texas Instruments) were more committed to new technology, more adapted to it in terms of personnel and management, had the right approach to how to develop this technology.

1. New or changed customer requests. Often, a competitive advantage arises or changes hands when buyers have completely new demands or their views on “what is good and what is bad” change dramatically. Those firms that are already entrenched in the market may not notice this or may not be able to respond properly, because in order to respond to these requests, a new value chain is required to be created. For example, American fast food companies have gained an advantage in many countries because customers wanted cheap and always available food, and restaurants have been slow to respond to this demand, because the fast food chain operates in a completely different way from a traditional restaurant.
2. Emergence of a new industry segment. Another opportunity for competitive advantage arises when an entirely new industry segment is formed or existing segments are regrouped. Here there is an opportunity not only to reach a new group of buyers, but also to find a new, more efficient way to produce certain types of products or new approaches to certain group buyers. A striking example of this is the production of forklift trucks. Japanese firms have discovered an overlooked segment - small multi-purpose forklift trucks - and have taken it. At the same time, they achieved the unification of models and highly automated production. This example shows how taking on a new segment can dramatically change the value chain, which can be quite a challenge for competitors who are already established in the market.
3. Change in the cost or availability of production components. Competitive advantage often changes hands due to changes in the absolute or relative cost of components such as labor, raw materials, energy, transportation, communications, media, or equipment. This indicates a change in the conditions of suppliers or the possibility of using new or other components in their qualities. The firm gains competitive advantage by adapting to new conditions, while competitors are bound hand and foot by capital investments and tactics adapted to old conditions.

A classic example is the change in the ratio of labor costs between countries. So, Korea, and now other Asian countries have become strong competitors in relatively uncomplicated international construction projects, when wages rose sharply in more developed countries. Recently, the sharp fall in the prices of transport and communications opens up opportunities to organize the management of firms in a new way and thus gain a competitive advantage, for example, the ability to rely on specialized subcontractors or expand production around the world.

1. Change in government regulation. Changes in government policy in areas such as standards, environmental protection, new industry requirements, and trade restrictions are another common incentive for innovation to bring competitive advantage. Existing market leaders have adapted to certain "rules of the game" from the government, and when these rules suddenly change, they may not be able to respond to these changes. American exchanges benefited from the deregulation of securities markets in other countries because the United States was the first to introduce this practice, and by the time it spread around the world, American firms had already adjusted to it.

It is important to respond quickly to changing industry structure

The above can give firms a competitive advantage if firms understand their importance in time and take a decisive offensive. In so many industries, these early movers have held the lead for decades. Thus, German and Swiss dye companies - Bayer, Hoechst, BASF, Sandoz, Ciba and Geigy (later merged into Ciba-Geigy) - took the lead even before the First World War and have not lost ground until now. Procter & Gamble, Unilever and Colgate have been world leaders in detergents since the 1930s.

Early Birds benefit by being the first to benefit from economies of scale, driving down costs through intensive staff training, building brand image and customer relationships at a time when competition is not yet fierce, being able to choose distribution channels or getting the best plant locations and best profitable sources of raw materials and other factors of production. Quick response to new situation may give the firm a different kind of advantage that may be easier to retain. The innovation itself can be copied by competitors, but the benefits derived from it often remain with the innovator.

Early birders benefit most in industries where economies of scale are important and where customers have a strong hold on their subcontractors. Under such conditions, it is very difficult for a well-established competitor to challenge. How long an early bird can hold an advantage depends on how soon changes in the industry structure occur to negate that advantage. For example, in the consumer packaged goods industry, customer loyalty to any given brand of product is very strong and there is little change in the situation. Firms such as Ivory Soap, M&M's / Mars, Lindt, Nestle and Persil have maintained their positions for more than one generation.

Every major change in the structure of an industry creates the opportunity for new early risers. Thus, in the watch industry, the emergence in the 1950s and 1960s of new distribution channels, mass marketing and mass production allowed American firms Timex and Bulova to bypass Swiss competitors in terms of sales. Later, the transition from mechanical to electronic watches created a “breakthrough” that allowed the Japanese firms Seiko, Citizen, and then Casio to take the lead. That is, the “early birds” who win in one generation of a technology or product may well be the losers in a generational change, since their capital investments and skills are of a specialized nature.

But this example of the watch industry also reveals another important principle: early birds will only succeed if they can correctly predict changes in technology. American firms (for example, Pulsar, Fairchild and Texas Instruments) were among the first to start producing electronic watches, based on their position in the production of semiconductors. But they relied on watches with LED indication (LDI), and LEDs were inferior to both liquid crystal indicators (LCD) in cheaper models of watches, and traditional hand indication combined with a quartz movement in more expensive and prestigious models. The company Seiko decided not to produce watches with LED, but from the very beginning it focused on watches with LCD and quartz clocks. The introduction of LCDs and quartz watch movements gave Japan the lead in the mass sale of watches, and Seiko - world leadership in branch.

Spot what's new and implement it

Information plays a big role in the renewal process: information that competitors are not looking for; information not available to them; information available to everyone, but processed in a new way. Sometimes it is obtained by investing in market research or R&D. And yet surprisingly often the innovators are firms that simply look in the right places without complicating their lives with unnecessary reasoning.

Often innovation comes from outsiders in the industry. The innovator may be a new firm whose founder entered the industry in an unusual way or was simply not appreciated by the old firm with traditional thinking. Or the role of innovator may be managers and directors who have not worked in the industry before and are therefore more able to see the opportunity for innovation and more actively implement these innovations. In addition, innovation can occur when a firm expands its scope and introduces new resources, skills, or perspectives into another industry. Another country with different conditions or methods of competition can serve as a source of innovations.

"Outside" people or firms are often more likely to see new opportunities or have different skills and resources than long-standing competitors - just the right ones to compete in new ways. Leaders of innovative firms are often outsiders also in a hidden, social sense (not in the sense that they are the dregs of society), they just do not belong to the industrial elite, they are not even recognized as full-fledged competitors, and therefore they will not stop before to break established norms or even use not too fair methods of competition.

With rare exceptions, innovation comes at the cost of enormous effort. Success in applying new or improved methods of competition is achieved by the firm that stubbornly bends its line, in spite of all difficulties. This is where the lone wolf or small group strategy comes into play. As a result, innovations are often the result of necessity, and even the threat of collapse: the fear of failure is much more stimulating than the hope of victory.

For the above reasons, innovations often do not come from recognized leaders or even from large companies. The economies of scale in R&D that play into the hands of large firms are not so important, since many innovations do not require complex technology, and large companies, for various reasons, are often unable to see a change in the situation and quickly respond to it. In our study, along with large firms, smaller ones were also analyzed. In cases where large firms have been innovators, they have often acted as newcomers to one industry while having a strong foothold in another.

Why are some firms able to recognize new ways of competing while others are not? Why do some firms guess these ways before others? Why do some companies better guess the direction in which the technology will develop? Why is there such a huge effort to find new ways? These intriguing questions will be central to later chapters. Answers should be sought in such concepts as the choice of direction for the main efforts of the firm, the presence necessary resources and skills, as well as what forces influenced change. In all this, the national environment plays an important role. In addition, the degree to which domestic conditions favor the emergence of the aforementioned domestic outsiders and thereby prevent foreign firms from taking over the leadership of the country in existing or new industries largely determines national prosperity.

Hold the advantage

How long a competitive advantage can be maintained depends on three factors. The first factor is determined by the source of the advantage. There is a whole hierarchy of sources of competitive advantage in terms of retention. Benefits of low rank, such as cheap labor or raw materials, can be easily obtained by competitors. They can copy these advantages by finding another source of cheap labor or raw materials, or they can cancel them out by manufacturing their products or drawing resources from the same place as the leader. For example, in the production of consumer electronics, Japan's labor cost advantage has long since passed to Korea and Hong Kong. In turn, their firms are already threatened by the even greater cheapness of labor in Malaysia and Thailand. Therefore, Japanese electronic firms transfer production abroad. Also at the bottom of the hierarchy is the advantage based solely on the scale factor from the use of technologies, equipment or methods taken from competitors (or available to them). Such economies of scale disappear when new technology or methods make old ones obsolete (similarly, when the new kind goods).

Higher-order benefits (proprietary technology, differentiation based on unique products or services, a firm's reputation based on enhanced marketing efforts, or close customer relationships strengthened by the cost of changing suppliers to the customer) can be held for longer. They have certain features.

Firstly, in order to achieve such advantages, greater skills and abilities are required - specialized and more trained personnel, appropriate technical equipment and, in many cases, close ties with key clients.

Secondly, higher-order benefits are usually possible with long-term and intensive investments in production facilities, in specialized, often risky training of personnel, in R&D or in marketing. The performance of certain types of activities (advertising, product sales, R&D) creates tangible and intangible values ​​- the company's reputation, a good relationship with customers and a knowledge base. Often the first to react to a changed situation is the firm that has been investing in these activities longer than competitors. Competitors will have to invest as much, if not more, to get the same benefits, or invent ways to achieve them without such large expenses. Finally, the longest lasting benefits are the combination of large capital investments with better performance, which makes the benefits dynamic. Constant investment in new technology, marketing, the development of a branded service network around the world or the rapid development of new products makes it even more difficult for competitors. Higher-order benefits not only last longer, but are also associated with higher levels of productivity.

Benefits based on cost alone tend to be less durable than those based on differentiation. One reason for this is that any new source of cost reduction, no matter how simple, can immediately take away the firm's cost advantage. Thus, if labor is cheap, it is possible to outperform a firm with much higher labor productivity, while in the case of differentiation, in order to outperform a competitor, it is usually necessary to offer the same set of products, if not more. In addition, cost-only advantages are more vulnerable because the introduction of new products or other forms of differentiation can destroy the advantage gained by producing old products.

The second determinant of retention of competitive advantage is the number of clear sources of competitive advantage available to firms. If a firm relies on only one advantage (say, a less expensive design or access to cheaper raw materials), competitors will try to deprive it of this advantage or find a way to get around it by capitalizing on something else. Firms that have been in the lead for many years strive to secure as many advantages as possible for themselves at all links in the value chain. So, Japanese small-sized copiers have modern design features They are easy to use, cheap to produce due to a high degree of flexible automation, and sold through a wide network of agents (dealers) - this provides a larger clientele than traditional direct selling. In addition, they have high reliability, which reduces the cost of after-sales service. The fact that the company has a large number of advantages over competitors significantly complicates the task of the latter.

The third and most important reason for maintaining a competitive advantage is the constant modernization of production and other activities. If the leader, having achieved an advantage, rests on its laurels, almost any advantage will eventually be copied by competitors. If you want to maintain an advantage, you cannot stand still: a firm must create new advantages at least as fast as competitors can copy existing ones.

The main task is to constantly improve the firm's performance in order to increase existing advantages, for example, to operate production facilities more efficiently or provide more flexible customer service. Then it will be even more difficult for competitors to get around it, because for this they will need to urgently improve their own performance, which they may simply not have the strength to do.

Nevertheless, in the long run, in order to maintain a competitive advantage, it is necessary to expand the set of its sources and improve them, move on to higher-order advantages that last longer. This is exactly what Japanese automobile firms did: initially they entered foreign markets with low-cost small-class cars of sufficiently high quality, achieving success through cheap labor. But even then, while still having this advantage, Japanese automakers began to improve their strategy. They began investing heavily in building large, modern facilities and benefiting from economies of scale, then began to innovate technology by being the first to introduce just-in-time and a number of other methods to improve quality and efficiency. This gave a higher quality than that of foreign competitors, and, as a result, reliability and customer satisfaction with the product. Recently, Japanese automotive firms have become leaders in technology and are introducing new brands with enhanced consumer properties.

Change is needed to maintain the advantage; Firms must take advantage of industry trends without ignoring them. Firms must also invest to protect areas that are vulnerable to competition. Thus, if biotechnology threatens to change the direction of research in the pharmaceutical industry, a pharmaceutical company seeking to maintain a competitive advantage must immediately create a biotechnology base that surpasses that of its competitors. Hoping that a competitor's new technology will fail, ignoring a new market segment or distribution channel are clear signs that competitive advantage is slipping away. And such a reaction, alas, occurs all the time!

In order to maintain positions, firms sometimes have to give up existing advantages in order to achieve new ones. For example, Korean shipbuilders only emerged as world leaders when they dramatically increased shipyard capacity, dramatically increased efficiency through new technologies while reducing labor requirements, and mastered the production of more complex ship types. All these measures reduced the importance of labor costs, although Korea still had an advantage in this respect at the time. The seeming paradox of giving up former advantages is often daunting. However, if the firm does not take this step, no matter how difficult and counterintuitive it may seem, competitors will do it for it and eventually win. How the “environment” in the country encourages firms to take such steps will be discussed later.

The reason that few firms manage to maintain leadership is that it is extremely difficult and unpleasant for any successful organization to change strategy. Success breeds complacency; a successful strategy becomes routine; stop searching and analyzing information that could change it. The old strategy takes on an aura of holiness and infallibility and is deeply rooted in the firm's mindset. Any proposal to make a change is regarded almost as a betrayal of the interests of the company. Successful firms often seek predictability and stability; they are fully occupied with maintaining the achieved positions, and making changes is constrained by the fact that the company has something to lose. It is only when there is nothing left of the old advantages that they think about replacing old advantages or adding new ones. And the old strategy is already ossified, and when there are changes in the structure of the industry, leadership changes. Innovators and new leaders become small firms, whose hands are not tied by history and previous investments.

In addition, a change in strategy is also blocked by the fact that the firm's previous strategy is embodied in the skills organizational structures, specialized equipment and the reputation of the company, and with a new strategy, they may “not earn”. This is not surprising, because it is precisely on such specialization that gaining an advantage is based. Rebuilding the value chain is a difficult and costly process. IN large companies in addition, the sheer size of the firm makes it difficult to change strategy. The process of changing strategy often requires financial sacrifices and troublesome, often painful changes in the organizational structure of the firm. For firms unencumbered by the old strategy and previous capital investment, adopting a new strategy is likely to cost less (in purely financial terms, not to mention less organizational problems). This is one of the reasons why the outsiders mentioned above act as innovators.

Further, tactics aimed at maintaining a competitive advantage for firms that have gained a foothold in the industry are in many ways something unnatural. Most often, companies overcome the inertia of thinking and obstacles to the development of advantages under the pressure of competitors, the influence of buyers, or purely technical difficulties. Few firms make major improvements or change strategy voluntarily; most do it out of necessity, and it happens mainly under pressure from outside (i.e. external environment) and not from within.

The management of companies that hold a competitive advantage is always in a somewhat unsettling state. It acutely senses a threat to its firm's leadership position from outside and takes retaliatory action. The influence of the national environment on the actions of firm management is an important issue, which will be discussed in detail in subsequent chapters.

Competing in the global market

The above basic principles of competitive strategy exist regardless of whether the company operates in the domestic or international market. But when analyzing the role of the country in the formation of a competitive advantage, those industries where competition is of an international nature are of primary interest. It is necessary to understand how firms achieve competitive advantage through the strategy of operating in the international market and how this enhances the advantages gained in the domestic market.

Forms of international competition in different industries vary significantly. At one end of the spectrum of forms of competition is a form that can be called "multi-national" (multidomestic). Competition in each country or a small group of countries, in fact, proceeds independently; the industry under consideration exists in many countries (for example, there are savings banks in Korea, Italy and the United States), but each of them competes in its own way. The reputation, customer base, and capital of a bank in one country have little or no effect on the success of its operations in other countries. MNCs may also be among the competitors, but their competitive advantages in most cases are limited to the borders of the country in which these companies operate. Thus, international industry represents, as it were, a set of industries (each within its own country). Hence the term "multinational" competition. Industries where competition traditionally takes this form include many types of trade, food production, wholesale trade, life insurance, savings banks, simple hardware and caustic chemicals.

At the opposite end of the spectrum are global industries, in which a firm's competitive position in one country significantly affects its position in other countries. Here, competition is on a truly global basis, with competing firms relying on the advantages that flow from their worldwide operations. Firms combine the advantages achieved in their home country with those they have gained through their presence in other countries, such as economies of scale, the ability to serve clients in many countries, or a reputation that can be established in another country. Global competition exists in industries such as civil aircraft, televisions, semiconductors, copiers, automobiles, and watches. The globalization of industries especially intensified after the Second World War.

In the extreme expression of the "multi-national" industry, achieving national advantage or competitiveness in the international market is not even a question. Almost every country has such industries. Most (if not all) of the firms competing in these industries are local, because when each country has its own rules of competition, it is very difficult for foreign firms to gain a competitive advantage. International trade in such industries is modest, if not non-existent. If the firm is owned by a foreign company (which is rare), there is very little control from the foreign owner from its headquarters. The provision of jobs in the foreign affiliate, the status of "local corporate citizen" and the location of the necessary research (at home or abroad) are not his concern: the national affiliate controls all or almost all of the activities necessary to ensure competitive status. In industries such as trading or metal fabrication, there is usually no heated debate about trade problems.

On the contrary, global industries are the arena of struggle of firms from different countries, where competition is conducted in ways that significantly affect the economic prosperity of countries. The ability of a country's firms to gain a competitive advantage in global industries holds great promise for both trade and foreign investment.

In global industries, firms willy-nilly have to compete internationally to gain or not lose competitive advantage in critical industry segments. True, there may well be purely national segments in such industries, because of the unique needs in such segments, only firms of this country can flourish. But focusing primarily on the domestic market, operating in a global industry, is a dangerous business, no matter in which country the company is based.

Achieving competitive advantage through a global strategy

Global can be called a strategy in which the company sells its products in many countries, while applying a single approach. The mere fact of transnationality does not automatically mean the presence of a global strategy; if MNCs have branches operating independently and each in its own country, this is not yet a global strategy. Thus, many European MNCs, such as Brown Boveri (now Asea-Brown Boveri) and Phillips, and some American ones, such as General Motors and ITT, have always competed in this way, and yet this weakened their competitive advantage, giving competitors the opportunity to get ahead of them.

With a global strategy, the firm sells its product in all countries (or, in any case, in most countries) that are an important market for its products. This creates economies of scale that reduce the burden of R&D costs and enable the use of advanced manufacturing technology. The main issue becomes the placement of different links in the value chain and ensuring that it works so that the company's product can be sold around the world.

In global strategy, there are two distinct methods by which a firm can achieve a competitive advantage or compensate for various disadvantages due to country conditions. The first is the most advantageous placement various kinds activities in different countries to best serve the global market. The second is the ability of a global firm to coordinate the activities of affiliates scattered around the world. The placement of links in the value chain that are directly related to the customer (marketing, distribution and after-sales service) is usually tied to the location of the customer. Thus, in order to sell a product in Japan, a firm usually needs to have sales agents or distributors there and provide after-sales service locally. In addition, the location of other activities may be tied to the location of the buyer due to high transportation costs or the need for close interaction with the buyer. So, in many industries, production, delivery and marketing should be carried out as close as possible to the buyer. Most often, such a physical binding of activities to the client is required in all countries where the company operates.

On the contrary, activities such as production and supply of raw materials, etc., as well as ancillary activities (development or acquisition of technology, etc.) can be located regardless of the location of the client - such activities can be performed anywhere. As part of a global strategy, the firm locates these activities to benefit from lower costs or differentiation on a global scale. It can, for example, build one large factory for the global market, benefiting from economies of scale. As such, very few activities need only be performed in the firm's home country.

Decisions inherent only in the global strategy can be divided into two essential areas:

1. Configuration. In which and in how many countries does each value chain activity take place? For example, do Sony and Matsushita manufacture VCRs at the same large plant in Japan, or are they building additional plants in the US and UK?
2. Coordination. How are dispersed activities (that is, activities carried out in different countries) coordinated? For example, do different countries use the same brand and marketing tactics, or does each branch use its own brand and tactics tailored to local conditions?

In multinational competition, MNCs have autonomous branches in each country and manage them in much the same way that a bank manages securities. With global competition, firms try to gain a much greater competitive advantage from their presence in different countries, placing their activities with a global focus and clearly coordinating it.

Global strategy activity configuration

When planning its activities around the world within this industry, the firm is faced with the need to choose in two directions. First, should the activity be concentrated in one or two countries, or should it be dispersed over many countries? Second: in which countries to place this or that activity?

Activity concentration. In some industries, a competitive advantage is gained by concentrating activities in any one country and exporting finished products or parts abroad. This takes place in the following cases: when there is a large scale effect in the performance of a particular activity; when there is a sharp drop in production costs as the development of a new product, due to which it is profitable to produce products at one plant; when it is advantageous to place related activities in the same place, thus facilitating their harmonization. An export-focused, or export-based, global strategy is typical of industries such as aircraft, heavy engineering, structural materials, or consumer goods. Agriculture. As a rule, the activity of the company is concentrated in the home country.

A focused global strategy is especially characteristic of some countries. It is common in Korea and Italy. Today, in these countries, most of the goods are developed and produced within the country, and only marketing accounts for foreign countries. In Japan, this strategy is followed by most of the industries in which the country is successful internationally, although Japanese firms are now rapidly dispersing activities such as raw material procurement or assembly operations for various reasons. The type of international competitive strategy promoted and developed in a country determines the nature of the industries in which that country successfully competes in the international market.

The dispersion of activities. In other industries, they gain a competitive advantage or neutralize disadvantages from conditions in the home country by dispersing activities. Dispersal requires foreign direct investment. It is preferred in industries where high transportation, communication or storage costs make concentration unprofitable, or it is risky for various reasons (political motives, unfavorable exchange rates, or danger of supply interruption).

Dispersal is also preferred where local needs for different products vary widely. The resulting need to carefully tailor products to local markets reduces the economies of scale or falling costs with adoption that come with using a single large plant or laboratory to develop new products. Another important reason for dispersal is the desire to improve marketing in foreign country; in this way, the firm emphasizes its commitment to the interests of customers and / or provides a faster and more flexible response to changing local conditions. In addition, the dispersal of activities in many countries also gives the company valuable experience and professionalism obtained through the analysis of information from different parts of the world (although the company must be able to coordinate the activities of its branches).

In some industries, the state can very effectively induce the firm to choose a strategy of dispersal through tariffs, non-tariff barriers, purchases on a national basis. Very often, the government wants the firm to locate the entire value chain in its country (they say, this will give the country an additional benefit). Finally, the dispersal of some activities sometimes allows you to gain at the expense of the concentration of others. Thus, by carrying out final assembly in one's own country, one can "appease" one's government and obtain freer imports of components from large-scale centralized component factories located abroad.

Ultimately, the choice between concentration and dispersion depends on the type of activity performed. In truck manufacturing, leaders such as Daimler-Benz, Volvo and Saab-Scania do most of their R&D in-house and assembly is done in other countries. The best options for concentration-diffusion in different industries are different, they can be different even in different segments of the same industry.

Here is an illustration of the above reasoning. Swedish firms in a number of mining-related industries are pursuing a strong dispersal strategy as customers in the industry value close collaboration with equipment suppliers providing service and technical assistance. In addition, the mining industry is almost everywhere state-owned or heavily influenced by the public sector. Therefore, for political reasons, the firm needs to have branches abroad, since the governments of other countries prefer to have an equipment supplier in the country, rather than import equipment. Swedish firms such as SKF (ball bearings) or Electrolux (household appliances) tend to adopt a highly dispersed strategy with large foreign direct investment and essentially autonomous subsidiaries; this is the result of differences in product needs between countries, the need for close interaction with customers in marketing and service, and pressure from the governments of the countries where the firm operates. Swiss firms also tend to disperse their activities in many industries, including trade, pharmaceuticals, food and dyes.

A global strategy of dispersal with large foreign investment also applies to industries such as consumer packaged goods, medical care, telecommunications, and many services.

Location of activities. In addition to choosing the locations where a particular activity will be carried out, it is also necessary to select a country (or countries) for this. Usually, all activities are first concentrated in the home country. However, with a global strategy, a firm can perform assembly operations, manufacture components and parts, or even conduct R & D in any country of its choice - where it is most profitable.

The benefits of accommodation often manifest themselves in well-defined activities. One of major benefits that a global firm has is the ability to distribute different types of activities between countries, depending on where it is preferable to produce one or another of its types. Thus, it is possible, for example, to produce computer components in Taiwan, write programs in India, and do the main R&D in Silicon Valley in California.

The classic reason for locating a particular activity in a particular country is the lower cost of production factors. Thus, assembly operations are carried out in Taiwan or Singapore in order to benefit from the use of a well-trained, motivated, but cheap labor force. Capital is accumulated wherever possible, on the most favorable terms. For example, the Japanese company NEC, in order to expand its production capacity for the production of semiconductor devices, financed convertible debt not in Japan, where such a practice is not common, but in Europe. It should be noted that global competition causes an increasing dispersal of activities based precisely on such considerations. Many American firms are transferring production to the Far East (for example, almost all disk drives of American firms are produced there), and Japanese manufacturers sewing machines, sporting goods, radio components and some other products are actively investing in Korea, Hong Kong, Taiwan, and now in Thailand, placing production there.

Recently, there has been a trend to move activities abroad, not only to take advantage of production costs there, but also to conduct R&D, gain access to specialized skills available in these countries, or develop relationships with key customers.

For example, German firms producing equipment for the manufacture of plastics, and Swiss firms producing surveying equipment, located design offices in the United States to develop electronic control units. SKF (Sweden), the world leader in the production of ball bearings, now has a production and design base in Germany in close proximity to many German factories - leaders in various branches of engineering and from the automotive industry, which consumes ball bearings on a large scale.

Firms locate their activities abroad and in case it is - necessary condition for their business operations in their respective countries. In some industries, the assembly, marketing or service activities of a firm in a given country are essential to the sale of its products and services to consumers in that country. A good example is the production of industrial air conditioners with high technology: industry leaders (American firms such as Carrier and Trane) are active in many countries to best adapt products to local conditions and meet high maintenance requirements.

Government directives also affect the location of activities. Thus, many Japanese investments in the US and Europe (in industries such as the production of automobiles and spare parts for them, consumer electronics, etc.) are caused by current or possible restrictions on imports to Japan. Likewise, many Swedish, Swiss, and American firms moved their operations abroad before World War II because then trade restrictions were more important and transportation costs were higher (which is why their activities are often more dispersed than Japanese or German firms in that period). the same industry). Once a dispersed firm, it is difficult to bring it under a single control, as branch managers in different countries try to maintain the power and autonomy of their branches. The resulting inability of the firm to shift to the more focused and coherent strategies needed to gain competitive advantage is one reason why competitive advantage is lost in some industries.

However, this is not all the discussion about the best placement one type of activity or another. In the end the choice the best place to host activities that determine the firm's home country (primarily strategy development, R&D and the most complex production processes), is one of the main issues discussed in this book. Suffice it to say that the motives for choosing countries to carry out this or that activity are by no means limited to the classical explanations given here.

Global coordination

Another important means of achieving competitive advantage through a global strategy is the coordination of firm activities in different countries. Coordination (coordination) of activities includes the exchange of information, distribution of responsibility and coordination of the firm's efforts. It may provide some benefits; one of them is the accumulation of knowledge and experience gained in different places. If the firm learns how to better organize production in Germany, the transfer of this experience may be useful in the plants of this firm in the US and Japan. Conditions in different countries are always different, and this provides a basis for comparison and the possibility of assessing the knowledge gained in different countries.

Data from different countries provide information not only about a product or its production technology, but also about customer requests and marketing methods. By coordinating the marketing activities of all its divisions, a firm with a truly global strategy can get early warning of expected changes in industry structure, see dotted industry trends before they become obvious to everyone. Coordination of activities during its dispersal can give economies of scale by dividing the task into separate tasks for branches that determine their specialization. For example, the SKF company (Sweden) produces different sets of ball bearings at each of its foreign plants and, by organizing mutual deliveries between countries, ensures the availability of the entire range of products in each of them.

The dispersal of activities, if agreed upon, may allow the firm to respond quickly to changes in exchange rates or factor costs. Thus, a gradual increase in production in a country with a favorable exchange rate can reduce general expenses; this tactic was used in the late 1980s by Japanese firms in a number of industries because the Japanese yen was then high.

In addition, coordination can enhance the product differentiation of a firm whose customers are mobile or multinational buyers. Consistency in the location of the production of a particular product and in the approach to doing business on a worldwide scale strengthens the reputation of the brand. The ability to serve multinational or mobile customers where they want is often of great importance. Coordinating the activities of subsidiaries in different countries can make it easier for a firm to influence the governments of these countries if the firm has the ability to expand or curtail activities in one country at the expense of others.

Finally, the coordination of activities in different countries allows you to respond flexibly to the actions of competitors. A global firm can choose where and how to fight a competitor. She can, for example, give him a decisive battle where he has the largest production or inflow Money, and thereby reduce the resources of the opponent, which he needs to compete in other countries. IBM and Caterpillar used exactly this defensive tactic in Japan. A firm focusing only on the domestic market does not have such flexibility.

Dramatically different customer needs and local conditions from country to country make it difficult to harmonize activities across countries, making experience gained in one country not applicable in others. Under such conditions, the industry becomes multinational.

However, while there are significant benefits to coordinating, achieving it in a global strategy is organizationally challenging due to its scale, language barriers, cultural differences and the need to share open and reliable information at a high level. Another serious difficulty is the coordination of the interests of the managers of the firm's branches with the interests of the firm as a whole. Let's say the German branch of a firm doesn't want to inform the US branch of its latest technology advances for fear that the US branch will, well, overtake it in the annual recap. In other words, branches of a firm in different countries often see each other not as allies, but as competitors. These annoying organizational problems make full coordination in global firms the exception rather than the rule.

Advantages due to placement and due to the structure of the company

The competitive advantage of a global firm can be usefully divided into two types: based on the location of activities (in which country it is located) and independent of location (based on the system of activities of the firm around the world). Advantages based on the location of activities in a particular country come either from the home country of the firm or from other countries in which the firm operates. The global firm seeks to use the advantages gained in the home country to enter foreign markets, and may also use the advantages gained from performing certain activities abroad to enhance the advantages or offset the disadvantages in the home country.

The advantages based on the structure of the firm stem from the overall volume of the firm's trade, the speed of product development at all of the firm's plants around the world, and the firm's ability to coordinate activities "at home" and abroad. Economies of scale in production or R&D are not in themselves tied to a country - a large factory or research center can be located anywhere.

To start global competition, it is necessary for some firms to achieve an advantage in their countries that allows them to enter foreign markets. Competitive advantage achieved exclusively in the home country of the firm is enough to start global competition. However, over time, successful global firms begin to combine the advantages achieved "at home" with the advantages of locating certain activities in other countries and from the system of the firm's activities around the world. These additional advantages, combined with the “home” achieved, make the latter more resilient, and at the same time compensate for the disadvantageous moments of the situation in the home country. Thus, the advantages of different sources are mutually enhanced. The overall economies of scale from global locations have enabled, for example, the German firms Zeiss (optics) and Schott (glass) to allocate more funds to R&D and better take advantage of technology and demand in their home country.

Practice shows that firms that do not use and develop the advantages of the home country through a global strategy are vulnerable to competitors. It is the combination of benefits from the conditions in the home country, from the location of certain activities abroad and from the system of global activity of the firm, and not each separately, that creates international success.

Now that the globalization of competition has become common knowledge, the focus has been on the benefits of firm structure and of locating activities in other countries. In fact, the benefits of home country conditions are usually more important than others (a topic we will return to in later chapters).

Choosing a global strategy

There is no single type of global strategy. There are many ways to compete, and each requires a choice of where to host activities and how to coordinate them. Each industry has its own optimal combination. Most global strategies are an inextricable combination of trade and foreign direct investment. Finished products are exported from countries that import components, and vice versa. Foreign investment reflects the placement of manufacturing and marketing activities. Trade and foreign investment complement each other rather than replace each other.

The degree of globalization often differs across industry segments, and the optimal global strategy varies accordingly. For example, in the production of lubricating oils, there are two distinct strategies. In the production of automotive motor oils, competition is multinational in nature, that is, in each country it is carried out separately. The nature of traffic, climatic conditions and local legislation are different everywhere. During production, different brands of base oils and additives are mixed. The economies of scale here are small, and transport costs are high. Distribution and distribution channels, which are very important for competitive success, vary greatly from country to country. In most countries, domestic firms (eg Quaker State and Pennzoil in the US) or MNCs with stand-alone subsidiaries (eg Castrol in the UK) lead the way. In the production of oils for marine engines, everything is different: here - a global strategy; ships move freely from country to country, and it is necessary that every port they enter have the right brand of oil available. Therefore, the reputation of the brand has become global, and successfully operating companies producing oils for marine engines (Shell, Exxon, British Petroleum, etc.) are global companies.

Another example is the hotel industry: competition in many segments is multinational, as most links in the value chain are tied to the location of the client, and the difference in needs and conditions between countries reduces the benefits of coordination of activities. However, if we consider hotels of the highest class or designed primarily for businessmen, then here the competition is more global. Global competitors such as Hilton, Marriott or Sheraton have properties scattered around the world but use the same brand, the same look, the same standard of service and the same room booking system from anywhere in the world, which gives them the advantage of serving businessmen, constantly traveling all over the world.

When the production process is broken down into stages, there are also often different degrees and patterns of globalization. Thus, in the production of aluminum, the initial stages (enrichment and smelting of metal) are global industries. The further stage (the production of semi-finished products, such as castings or stampings from aluminum) is already a number of industries with multinational competition. Demand for different products varies from country to country, transportation costs are high, customer service requirements on site are also high. The economies of scale in the entire value chain are quite modest. In general, the production of raw materials and components is usually more global than the production of finished products.

Differences in the types of globalization of different segments of the industry, stages of the production process and groups of countries create the possibility of drawing up focused global strategies aimed at a specific segment of the industry on a worldwide scale. Thus, Daimler-Benz and BMW, having chosen such a strategy, focused on high-end and business-class vehicles with high technical performance, while Japanese firms Toyota, Isuzu, Hino, and others focused on light trucks.

A firm pursuing a focused global strategy focuses on some segment of the industry that is undeservedly forgotten by firms with a broad specialization. Global competition can give rise to entirely new segments of an industry because a firm operating in any sector of its industry around the world can gain economies of scale on this basis. The reasons for this strategy may vary. For example, it is unprofitable to work in this segment of the industry in only one country because of the high costs. In some industries, this is the only true strategy, since the benefits of globalization are achievable only in one segment (for example, expensive hotels for businessmen).

A global focus could be the first step towards a global strategy for more general profile. A firm enters global competition in a given segment when it has unique advantages in its home country. For example, in industries such as automobiles, forklifts, and televisions, Japanese firms initially gained footholds by focusing on a neglected market segment—the most compact product in each of these industries. They then expanded their product range and became world leaders in their respective industries.

Relatively small firms, not just large ones, can also compete globally. Small and medium-sized firms account for a significant share of international trade, especially in countries such as Germany, Italy and Switzerland. They often focus on narrow industry segments or operate in relatively small-scale industries. A focused global strategy is also characteristic of MNCs from smaller countries such as Finland or Switzerland, and of small and medium-sized firms from all countries. For example, the Montblanc company (Germany) pursues such a policy in the production of expensive writing instruments, and most Italian companies that produce shoes, clothing and furniture also compete worldwide in a narrow segment of their industries.

Small and medium-sized firms tend to build their strategy mainly on exports - foreign direct investment is modest. Nevertheless, the number of MNCs of the middle hand is growing. For example, in Denmark, Switzerland and Germany, there are many relatively modest-sized MNCs that focus on certain segments of their industries. With limited resources, small firms have difficulty entering foreign markets, identifying needs in those markets, and providing after-sales service. In different industries, these problems are solved in different ways. One way is to sell goods through sales agents or their importers (typical for Italian firms), the other is to act through distributors or trading firms (typical for Japanese and Korean firms). Another way is to use industry associations to create a common sales infrastructure, organize trade shows and fairs, and engage in market research. Thus, without cooperatives, the success of the agricultural industries in Denmark would not have been possible. Recently, small firms have been making alliances with foreign firms in order to be able to compete globally.

Industry globalization process

The globalization of industries occurs because changes in technology, customer demands, public policy or infrastructure within a country enables firms in one country to "break away" from competitors in other countries, or increases the value of the benefits arising from a global strategy. For example, in the automotive industry, globalization began when Japanese firms achieved a significant competitive advantage through quality and productivity, the need for cars in different countries became more similar (in no small part due to higher fuel prices in the United States), and international transportation costs fell ( and these are just some of the reasons).

The strategic innovation itself often opens up opportunities for the globalization of an industry. International leadership in an industry is often the result of a firm discovering a way to make a global strategy viable. For example, it may find a way to cost-effectively adapt a product designed and manufactured in one place to the conditions of different countries (say, modifying a standard product to a different voltage in the local power grid). So, in the production of intercom systems, computer and other systems used in telecommunications, Northern Telecom, NEC and Ericsson won thanks to the design of the manufactured equipment, which allows the use of modular software and requires only minor alterations to be combined with the local telephone network. In addition, the firm may develop a new product that is widely popular, or a marketing method that makes this product popular. Finally, innovative solutions can be found to remove obstacles to a global strategy. For example, American firms were not only the first to produce plastic disposable syringes, which immediately gained wide popularity, but also reduced transportation costs compared to glass syringes and gained economies of scale by manufacturing products at one world-scale factory.

Emerging leaders in global industries always start with some advantage achieved "at home", whether it's better design, better workmanship, new method marketing or gain in factor costs. But as a rule, in order to maintain the advantage, the firm must go further: the advantage achieved “at home” must become a tool for entering the foreign market. And once established there, successful firms build on the initial advantages with new ones, based on economies of scale or brand reputations gained from operations around the world. Over time, the competitive advantage is strengthened (or the disadvantages are offset) by locating certain activities abroad.

Although the advantages achieved in the home country are difficult to sustain, a global strategy can complement and enhance them. A good example is consumer electronics. Matsushita, Sanyo, Sharp and other Japanese firms initially focused on low cost, releasing simple portable TVs. By entering the foreign market, they have gained economies of scale and further reduced costs by reducing the cost of developing new models. Through trading all over the world, they were then able to invest heavily in marketing, new equipment and R&D, in technology ownership. Japanese firms have long since moved away from a cost-focused strategy and are now producing a wide range of increasingly differentiated televisions, VCRs, and the like, using the highest quality materials and technology. And today their Korean competitors - Samsung, Gold Star, etc. - have adopted the strategy of focusing on costs and are releasing simpler, standard models using cheap labor.

Factor cost is a low order advantage and is also highly variable for both a domestically competitive firm and an internationally competitive one. This can be seen in industries such as tailoring or construction. By outsourcing, a firm with a global strategy can neutralize or even exploit changes in factor costs that harm its country's interests. For example, Swedish firms that produce heavy trucks (Volvo and Saab-Scania) have long moved part of their production to countries such as Brazil and Argentina. In addition, firms whose only advantage is factor cost gains rarely emerge as new industry leaders. The strategy of emulating leaders is too easy to be rendered ineffective by transferring to offshore production or offshore provisioning. Firms with low factor costs will be able to become leaders only if they combine this advantage with a focus on some industry segment ignored or unoccupied by the leaders and/or with capital investment in large factories equipped with the most modern technology at the moment. And they will be able to keep their advantage only by globally competing and constantly strengthening this advantage. The influence of country conditions on the initial advantage of firms, the ability of firms to develop these advantages through a global strategy, the ability and will of firms to achieve new advantages over time are the main topics of subsequent chapters.

Leading the way in global strategy

An immediate response to any change in the structure of an industry is just as important in global competition as it is in domestic competition, if not more so. Ultimately, the leaders in many global industries are those firms that are the first to recognize a new strategy and apply it in global scale. For example, Boeing was the first to apply a global strategy in the production of aircraft, Honda - motorcycles, IBM - computers, and Kodak - photographic films. American and British firms, producing a wide variety of packaged consumer goods, retain their leadership in no small part because they were the first to adopt a global strategy.

Global competition amplifies the benefits of a quick response to change. Early Birds are the first to spread their activities around the world; this added value, in turn, leads to reputational, scale, and uptake advantages. And already the positions won on the basis of such advantages can be held for decades and even longer. Thus, in the production of tobacco products, whiskey and high-quality porcelain, English firms have been leading for more than a century, despite the decline in the British economy as a whole. Similar examples of long-term leadership can be found in Germany ( printing machines, chemical products), USA ( soft drinks, movies, computers) and practically in all other developed countries.

The reasons for changing the positions of countries in the competitive race are the same as in the more general cases discussed above. Established international leaders lose ground if they do not respond to changes in the structure of the industry, giving other firms the opportunity to bypass them through the rapid transition to new technologies or products. Thus, economies of scale, reputation and connections with the distribution channels of established leaders are lost. Thus, the traditional leaders of some industries have given way to Japanese firms in those industries that have been greatly changed by the advent of electronics (for example, the production of machine tools and tools) or where mass production has replaced the traditional small-scale production (production of cameras, forklift trucks, etc.). Existing leaders also fail if other firms discover new market segments that have been ignored by the leaders. Thus, Italian firms producing electrical household equipment saw an opportunity to produce compact, unified models using mass production and sell them to newly emerging retail chains so that they sell them under their own brand. By actively developing this rapidly growing new segment, Italian manufacturers of household appliances have become European leaders. Firms that are the first to exploit changes in industry structure often become new leaders because they benefit from the next change in industry structure. The home country significantly affects the ability of firms to respond to these changes, and, as already mentioned, firms in one or two countries often become global leaders in the industry.

The ability of firms to retain the benefits gained from the old strategy is often the result of sheer luck, namely that there are no major changes in the industry. But still, more often it is the result of constant updating in order to adapt to changing conditions. Subsequent chapters explore in detail the country characteristics that explain this adaptability. The forces that enable a country's firms to maintain a competitive advantage once achieved are the main pillar of a country's prosperity.

Alliances and global strategy

Strategic alliances, which can also be called coalitions, are an important vehicle for pursuing global strategies. These are long-term agreements between firms that go beyond ordinary trading but do not go as far as merging firms. The term "alliance" refers to a number of types of cooperation, including joint ventures, sale of licenses, long-term supply agreements and other types of intercompany relationships24. They are found in many industries, but especially often in the automotive, aircraft, aircraft engine, industrial robots, consumer electronics, semiconductor devices and pharmaceuticals.

International alliances (firms in the same industry based in different countries) are one of the means of global competition. With an alliance, there is a division between partners of the activities included in the value chain around the world. Alliances have been used for quite some time, but their nature has changed over time. Previously, firms from developed countries formed alliances with firms from less developed countries for marketing (often such a maneuver was required to gain market access). Now, more and more firms from highly developed countries are making alliances to work together in large regions or around the world. In addition, alliances are now entered into not only for marketing, but also for other activities. Thus, all American automobile companies have alliances with Japanese (and in some cases Korean) firms to produce cars sold in the United States.

Companies enter into alliances for the sake of gaining advantages. One is economies of scale, or reductions in development time and costs, achieved through collaborative efforts in marketing, manufacturing components, or assembling certain models of finished products. Another advantage is access to local markets, necessary technologies, or meeting the requirements of the government of the country in which the company operates that a company operating in the country belongs to that country. For example, General Motors Corporation's alliance with Toyota - NUMMI - was conceived by General Motors in order to learn from Toyota's manufacturing experience. Another benefit of alliances is risk sharing. Yes, some pharmaceutical companies entered into cross-licensing agreements in the development of new drugs to reduce the risk that studies in each individual company will fail. Finally, firms with complex and advanced technologies often use alliances to influence the nature of competition in an industry (for example, by licensing technology that is in high demand to achieve standardization). Alliances can offset competitive disadvantages, whether it be costly inputs or outdated technology, while maintaining company independence and eliminating the need for costly mergers.

However, alliances are costly both strategically and organizationally. Take, for a start, the very real problems of coordinating activities independent partners that have significantly different and even contradictory goals. Difficulties in the coordination order jeopardize the benefits of a global strategy. In addition, today's partners may well be tomorrow's competitors; this is especially true for partners with a stronger or more rapidly developing competitive advantage. Japanese firms have confirmed this idea many times. To top it off, the partner gets a share of the firm's profits, sometimes quite substantial. Alliances are fragile and can fall apart or fail. Often everything starts out great, but soon the alliance breaks up or ends with a merger of companies.

Alliances are often a temporary measure, they are common in industries that are undergoing structural changes or intensifying competition, and managers of firms fear that they can not cope alone. Alliances are the result of firms' lack of confidence in their abilities and are most often found in second-tier firms trying to catch up with leaders; at first they give hope to weak competitors to remain independent, but in the end it may well come to the sale of the company or its merger with another.

As can be seen from the above, the alliance is not a panacea. And to stay ahead of the competition, a firm must develop internal reserves in the areas most important to achieving competitive advantage. As a result, world leaders rarely, if ever, rely on partners when they need the funds and skills they need to gain a competitive edge in their industry.

The most successful alliances are very specific. The alliances forged by world leaders such as IBM, Novo Industry (the insulin company) and Canon are narrowly focused, focused on entering certain markets or accessing certain technologies. Alliances are generally a means of increasing competitive advantage, but they are rarely an effective means of creating it.

Influence of National Conditions on Competitive Success

The principles of competitive strategy outlined above show how much to take into account when highlighting the role of the home country in international competition. Different strategies are more suitable for different industries, since the structure of industries and the sources of competitive advantage in them are not the same. And in the same industry, firms can choose different strategies (and successfully apply them) if they strive to different types competitive advantage or targeted different segments of the industry.

A country succeeds when the conditions in the country are conducive to pursuing the best strategy for an industry or segment. A strategy that works well in this country should lead to a competitive advantage. Many of the characteristics of the country facilitate or, conversely, make it difficult to implement a particular strategy. These features are heterogeneous - from the behavioral norms that determine the methods of managing firms, to the presence or absence of certain types of skilled labor in the country, the nature of demand in the domestic market and the goals that local investors set for themselves.

To gain a competitive advantage in complex industries, improvements and innovations are required - the search for new, better ways competition and the application of these methods everywhere, as well as the continuous improvement of products and technologies. A country is successful in these industries if its conditions are conducive to such activities. Gaining advantage requires anticipating new ways to compete and a willingness to take risks (and invest in risky ventures). And countries that succeed are those whose environments give firms a unique opportunity to recognize new competitive strategies and an incentive to immediately apply these strategies. Those countries whose firms do not properly respond to changes in the situation or do not have the necessary capabilities, are the losers.

Maintaining a competitive advantage for a long period requires the improvement of its sources. Improving the edge requires, in turn, more sophisticated technologies, skills and production methods, and constant investment. Countries thrive in sectors where they have the skills and resources to change strategies. Firms that rest on their laurels, using a once and for all fixed concept of competitive advantage, quickly lose ground as competitors copy the techniques that once allowed these firms to get ahead.

The constant change required to maintain competitive advantage is both inconvenient and organizationally difficult. Countries succeed in industries where firms are under pressure to overcome inertia and engage in continuous improvement and innovation rather than sitting idle. And in those industries where firms stop improving, the country loses.

The country excels in those industries where its advantages as a national base carry weight in other countries and where improvements and innovations precede international needs. To achieve international success, firms must transform domestic leadership into international leadership. This makes it possible to strengthen the advantages gained “at home” with the help of a global strategy. Countries thrive in industries where domestic firms compete globally, encouraged by the government or under duress. In looking for the determinants of a country's competitive advantage across industries, one needs to identify the conditions in a country that are conducive to competitive success.

Under competitive advantages factors are understood, the use of which in a particular situation (in a given market, at a certain time, etc.) allows the company to overcome the forces of competition and attract customers. Different market sectors require different benefits, the achievement of which is main goal competitive strategy and an incentive to upgrade all aspects of the company's activities.

As already noted, competitive advantages are created by unique tangible and intangible assets owned by the enterprise, as well as by those areas of activity that are strategically important for this business, which allow them to win in the competition. The basis of competitive advantages, therefore, is the unique resources of the enterprise, or special competence in areas of activity that are important for this business. Competitive advantages are realized, as a rule, at the level of business units and form the basis of business strategy.

Competitive advantages must be significant, dynamic, based on unique factors, transformed taking into account changing consumer demands, the national and global situation. Strategic management sometimes defined as competitive advantage management.

In the historical aspect theory of competitive advantage, developed by M. Porter, replaced comparative advantage theory D. Riccardo. According to this theory, comparative advantage is due to the use by a country or an individual firm of abundant factors of production - labor and raw materials, capital, etc. But scientific and technical revolutions and the globalization of business have led to the fact that the advantages based on abundance have become fragile, and focusing on them slows down scientific and technical progress and implementation of his achievements.

Therefore, to replace comparative advantage a new paradigm has come - competitive advantages. This means, firstly, that the benefits are no longer static, they change under the influence of the innovation process (production technologies, management methods, methods of delivery and marketing of products, etc. change). Therefore, in order to maintain competitive advantages, constant innovation is required. Secondly, the globalization of business forces companies to take into account not only national but also international interests.

Theory of competitive advantages by M. Porter is based on the concept of a value chain, which considers a company as a set of interrelated activities: core (production, sales, service, delivery) and supporting (personnel, supply, technology development, etc.).

Moreover, the firm not only carries out a chain of such activities, but at the same time is itself an element big network, formed by the interweaving of chains of other companies on a national and even global scale.

The advantages, according to M. Porter, largely depend on the clear organization of such a chain, the ability to benefit from each link and give customers some value at a lower price.

The possibility of this facilitates analysis, which makes it possible to identify the strengths and weaknesses of the company, assess the competitive position of it and its rivals, optimize the chain itself, and form competitive strategies that are usually implemented by divisions.

Consider classification of competitive advantages.

1. From the point of view of the state at any given moment They may be potential And real(The latter appear only with the entry into the market, but ensure the company's success). Losers usually have no advantage at all.

2. From the point of view of the period of existence competitive advantage can be strategic lasting for at least two to three years, and tactical providing current superiority for a period of up to a year.

4. From the point of view of the source distinguish between the advantages of high and low rank.

High Rank Benefits- associated with the company's good reputation, qualified personnel, patents, long-term R & D, developed marketing, modern management, long-term relationships with customers, etc. Low Rank Benefits- associated with the availability of cheap labor, the availability of sources of raw materials, etc. They are less stable, because may be copied by competitors.

Competitive advantages can take many forms depending on the specifics of the industry, product and market. When determining competitive advantages, it is important to focus on the needs of consumers and make sure that these advantages are perceived by them as such. The main requirement is that the difference must be real, expressive and significant. B. Karlof notes that, “Unfortunately, it is too easy to declare that you have competitive advantages without taking the trouble to check whether these supposed advantages correspond to the needs of customers ... As a result, products with fictitious advantages appear.”

There are the following sources of competitive advantage (they may be different in different industries and countries).

1. High availability of factors of production (labor, capital, natural resources) and their cheapness (the most unfavorable position for the factor is its high cost).

But today the role of this source is becoming secondary, because the competitive advantage based on the abundance or cheapness of production factors is tied to local conditions and is fragile and creates stagnation. The abundance or cheapness of factors can lead to their inefficient use.

2. Possession of unique knowledge (patents, licenses, know-how, etc.), constant contacts with scientific institutions). The use of anticipatory innovations, the rapid accumulation of specialized resources and skills, especially in an accelerated mode, with the passivity of competitors, can provide market leadership. Competitive advantages arising from constant improvement and change are also maintained only thanks to them.

Much innovation is usually evolutionary rather than radical, but often the accumulation of small changes produces more significant results than a technological breakthrough.

3. Convenient territorial location, possession of the necessary production infrastructure. At present, low communication costs lead to the fact that the importance of the location of the company as a factor in competitiveness, especially in the service sector, is reduced.

4. The presence of supporting industries that provide the company on favorable terms with material resources, equipment, information, and technologies. For example, an enterprise will be able to stay on the world market only when the supplier is also a leader in its field.

5. High level of national demand for the company's products. It favors the development of the company and strengthens its position on the foreign market. Studies show that leaders always start with an advantage at home and then spread their activities around the world based on it. Demand is characterized by: a large domestic market (the number of market segments and independent buyers), as well as the rate of its growth. They provide a competitive advantage where there are economies of scale.

6. Possession of comprehensive accurate information about the situation on the market (needs, trends in their change, main competitors), which allows you to choose the right market segment and strategy and successfully implement it.

7. Creation of reliable distribution channels, availability to the consumer, skillful advertising.

8. High level of organizational culture, which is in the XXI century. one of the main competitive advantages of any organization. Success in competition is achieved mainly by confrontation not so much money as people, so it depends on the coordinated actions of staff and managers.

9. Favorable market conditions for the company, image (popularity, favor of customers, presence of a well-known trademark).

10. Measures state support this type of production, communication leadership in economic and political circles.

11. The ability of the company to organize efficient production and marketing (ie, the functioning of all elements of the value chain).

12. High quality and a wide range of products, low costs, good service organization, etc. They form the most important advantage of the company - a favorable attitude towards the consumer.

At the same time, the presence of all types of competitive advantages is usually not required, since obtaining the effect from them depends on the effectiveness of their use. This circumstance is especially important for industries with simple technologies.

Summarizing all types of sources of competitive advantages, M. Porter highlights the determinants that create a business environment where firms in a given country operate, mutually reinforcing each other. He referred to them:

1) Specific factors of competition(include: human, material, financial resources, knowledge, infrastructure).

2) Demand conditions that need to be quickly studied, correctly recognized and interpreted.

3) Presence or absence of related or supporting industries, first of all, suppliers of resources and equipment. Without them, firms cannot meet the needs of customers. Suppliers operating at the level of world standards increase the competitiveness of consumers.

4) The nature of competition. New competitors increase competition, so you need to facilitate their emergence, because without strong competition fast growth leads to complacency.

Life cycle of competitive advantage consists of three phases: formation; use and development; destruction.

Formation competitive advantage is determined by the characteristics of the industry and the severity of competition, and most often occurs with significant changes in it. In capital-intensive industries and with complex technologies, its duration can be very significant, so there is a danger that competitors can quickly take retaliatory steps.

The principles of this process are:

1. constant search for new and qualitative improvement of existing sources of competitive advantages, optimization of their number;

2. Replacing low-ranking sources of advantage (such as cheap resources) with higher-ranking sources, which creates barriers for rivals to be constantly catching up. The advantages of a low rank are usually easily accessible to competitors and can be copied. Higher ranking advantages (proprietary technologies, unique products, strong relationships with customers and suppliers, reputation) can be retained longer. But this requires high costs and constant improvement of the company's activities.

3. priority search for competitive advantages in environment(although it is wrong to focus unilaterally only on this);

4. continuous improvement of all aspects of the company's activities.

Competitive advantage is always achieved through successful offensive actions. Defensive - only protect it, but rarely help to find it.

Usage and retention competitive advantages, as well as their creation, occurs, according to M. Porter, in close connection with the national characteristics of the country (culture, level of development of related and supporting industries, qualifications of the workforce, support from the state, etc.).

The ability to maintain competitive advantage depends on a number of factors:

1. Sources of competitive advantage. Competitive advantages of a high rank last longer and allow for greater profitability, in contrast to competitive advantages of a low rank, which are not so sustainable.

2. Evidence of sources of competitive advantage. If there are clear sources of advantage (cheap raw materials, a certain technology, dependence on a particular supplier), the likelihood that competitors will try to deprive the firm of these advantages increases.

3. Innovation. To maintain a leading position, the timing of innovation should be at least equal to the timing of their possible repetition by competitors. Innovation process at the enterprise allows you to move on to the realization of competitive advantages of a higher rank and increase the number of their sources.

4. Timely abandonment of a competitive advantage to acquire a new one. Relinquishing competitive advantage is important to the implementation of the strategy, as it creates barriers for imitators. M. Porter gives the example of a company that produces medicinal soap, which it distributes through pharmacies. The company refused to sell through shops and supermarkets, refused to introduce deodorizing additives into soap, thereby creating barriers for imitators. According to M. Porter, the introduction of the concept of "relinquishing competitive advantage" adds a new dimension to the definition of strategy. The essence of strategy is to determine not only what needs to be done, but also what don't do, that is, in a motivated rejection of competitive advantage.

Main reasons loss competitive advantages are:

§ deterioration of the factorial parameters of their sources;

§ technological problems;

§ lack of resources;

§ weakening the company's flexibility and ability to adapt;

§ weakening of internal competition.

Diversification, its content and types.

Diversification(from lat. diversificatio - change, diversity) is the distribution economic activity to new areas (expansion of the range of manufactured products, types of services provided, geographical scope of activity, etc.). In a narrow sense, diversification refers to the penetration of enterprises into industries that do not have a direct industrial connection or functional dependence on their main activity. As a result of diversification, enterprises turn into complex diversified complexes and conglomerates.

B. Karloff notes that the idea of ​​diversification has a long history. It was fashionable in the late 1960s and early 1970s, then it was replaced by views about the need to focus on the main areas of business. The reason for this was the processes of globalization of production and other phenomena associated with the effect of economies of scale in production.

In recent times, diversification has again become a priority. This is due to the existence of firms "which have large amounts of capital received in the main areas of business, and since the possibilities for further expansion in them are very limited, diversification seems to be the most appropriate way to invest capital and reduce risk" . But now they are talking about the need for a rational nature of diversification, assuming that, first of all, it is important for an enterprise to identify areas that will help overcome its weaknesses.

It is believed that by offering a whole range of goods and services, an enterprise can increase its competitiveness, weaken possible risks through diversification. These and other reasons encourage enterprises to expand their areas of activity by acquiring (absorbing) other firms or starting new types of business. Thus, banking, exchange and intermediary services merge into a single complex of financial services. There is a combination of various services within the tourism business. Transportation firms are beginning to offer life and property insurance, mail delivery, travel services, etc. In the manufacturing sector, enterprises are gaining control over distribution channels and over sources of raw materials, investing in advertising business, work in the financial market, etc.

Western experience shows that corporations that do business in a dynamic environment must constantly grow in order to survive. There are two basic growth strategies at the corporate level:

§ concentration in one industry;

§ Diversification into other industries.

Diversification is associated with such an advantage of large enterprises as the effect of mass production of homogeneous products. The essence of the diversity effect is that the production of many types of products within one large enterprise more profitable than the production of the same types of products in small specialized enterprises. However, this pattern is not universal, although it is applicable to a fairly large number of industries. It should be noted that diversification of the enterprise's activities is a form of corporate strategy implementation. Main commercial purpose diversification is to increase profits through the use of market chances and the establishment of competitive advantages, but the real ways of obtaining competitive advantages, and, therefore, motives diversifications are different (Figure 7.1).

Rice. 7.1. Motives for diversification.

Significant savings are provided by the multi-purpose joint use of the enterprise's production facilities. Costs are reduced due to the concentration of the distribution network (goods and services are sold through a single network, not necessarily your own). Another significant savings reserve is the intra-company transfer of information, knowledge, technical and managerial experience from one production to another. Added to this is the effect achieved through the multifaceted training of workers and the variety of information they receive.

It is believed that diversification should lead to a better use of the tangible and intangible resources of the enterprise, including through synergy. On the one hand, it reduces the risk by eliminating the dependence of the enterprise on any one product or market, but on the other hand, it increases it, since there is a risk inherent in diversification.

An example of diversification is the activities of a Japanese airline JAL after she got out of state control. She defined her mission as "taking a leading position in the integrated field of consumer and cultural services." Short-distance flights, including helicopter flights, have become new business areas; recreational services, including hotel industry, resort and tourist services; commodity circulation, finance, informatics, education.

Sales Generator

We will send the material to you:

From this article you will learn:

• What is a company's competitive advantage
• What are the types and sources of competitive advantages of the company
• What are the natural and artificial competitive advantages of the company
• How to correctly describe the competitive advantages of the company
• How to assess the competitive advantages of a company
• How to avoid mistakes in the formation of competitive advantages of the company

The company's market opportunity management system "produces" such a "product" as competitive advantages. No enterprise can exist if there is no demand for its products (services), just as in the absence of competitive advantages, there can be no question of market opportunities. The merit of the competitive advantages of the company is its recognition in the market and protection from the effects of competitive forces. If there are no competitive advantages, then the company simply cannot be competitive.

What are the company's competitive advantages

Under the competitive advantages of the company are understood such characteristics and qualities of the brand or product, thanks to which the organization objectively outperforms its competitors. The economic sphere does not develop in the absence of competitive advantages. They are an integral part of the corporate style of the company. In addition, they protect it from competitor attacks.

A company's sustainable competitive advantage is the preparation of an enterprise development plan that will ensure profit and the realization of the most promising opportunities. A mandatory requirement for this plan is that it should not be used by either real or supposed competing firms. Nor should they be allowed to adopt the results of its implementation.

The development of a company's competitive advantages is based on its goals and objectives, the achievement of which depends on the organization's position in the market for goods and services, as well as on how successful their implementation is. To create a basis that allows you to effectively develop the factors of the company's competitive advantages, as well as the formation of a strong relationship between this process and the conditions existing on the market, it is necessary to rebuild the functioning system.

What are the types of competitive advantages of a company? There are two of them:

What are the main sources of the company's competitive advantage

Competitive advantages of the company have a fairly well-established structure. Michael Porter identified 3 main sources for developing a company's competitive advantages: differentiation, cost, and focus. Let's talk about them in more detail:

• Differentiation

Starting to implement this strategy of competitive advantages of the company, you need to remember that it is based on the effective provision of services to consumers, as well as the presentation of the goods / services of the company in the best light.

• Costs

The implementation of this strategy is based on such competitive advantages of the company: minimal costs for personnel and scale, automation of all processes, the ability to use limited resources, work on technologies aimed at reducing production costs and having a patent.

• Focus

This strategy is based on the same sources as described above, but the target audience covered by the accepted competitive advantage is quite small. Consumers outside the firm may be dissatisfied with this competitive advantage of the firm, or it does not have any effect on them.

All companies have competitive advantages related to the group of natural (basic) ones. However, not all of them are covered. This is not done by organizations that believe that their competitive advantages are obvious or disguised under generally accepted clichés.

The main competitive advantages of the company include the following:

Competitive advantages of the company on the example of various business areas

What are the competitive advantages of construction companies:

• Presence of own design division.
• The staff is staffed only by highly qualified specialists.
• Availability of facilities that have already been put into operation.
• A paragraph with a detailed calculation proving the lower price level of company N.
• Availability of a fleet of own construction and auxiliary equipment.
• All types of insurance issued for each worker, providing all personnel with a full social package, the availability of special permits.
• Provision by the company of seasonal discounts (prices are lower in winter).
• Engineering control of each object.
• Fixed cost of construction, negotiated before the start of work. Guarantees to preserve it even if the ruble exchange rate weakens.
• Warranty for delivered items. Not blindly following fashion trends and using very expensive materials, but a conscious choice of the best and most affordable, which have already proven themselves.
• High speed of calculation of the cost of work (for example, half an hour). Perhaps there is an online calculator on the site.
• Full cycle of works. When the work is carried out by one company, customers are less worried about the process.

Transport companies can have the following competitive advantages:

• Refund of N% of the order value in case of delay by N minutes/hours.
• Free forwarding when ordering from … .
• No intermediaries: you entrusted us with the cargo, we will deliver it ourselves.
• Equipment Vehicle navigators and satellite radios, making it possible to track the location of the cargo at any time of the day.
• Guaranteed cleanliness of vehicles, absence of unpleasant odors that can be absorbed by the cargo.
• Free packing.
• A good fleet of foreign-made equipment, a small percentage (0.004) of breakdowns from the number of all trips.
• More low price per kilometer than competitors, possible due to bulk purchases of fuel.
• An impressive amount of cargo transported during the existence of the company (“Drivers transported N cargo in N years”, or “Driven N million (thousand) kilometers”).
• Even if you do not have any idea about the organization of cargo transportation, we will not cash in on you. Our conditions are favorable and the same for everyone.

Competitive advantages of organizations operating in the field of trade:

We carefully control the quality of purchased goods, refusing to purchase second-rate products.

• We provide a guarantee for the product, service it after the sale.
• Products are purchased in bulk, so we can sell them at low prices.
• We are constantly analyzing the market to find the best products.
• We listen to our customers, try to understand them and satisfy their needs.
• Our marketing activities are not characterized by aggression: we do not impose our products.
• Our outlet is conveniently located, it is easy to drive to it, we have equipped ramps, etc.
• Promotions are regularly held, within which goods can be purchased much cheaper.
• We advise the best, and do not impose the overwhelming and expensive.
• Situations when products do not suit you are normal. In such cases, we guarantee a refund of the full cost of the goods without lengthy proceedings.

Submit your application

Manufacturers have their own competitive advantages. Let's list them:

• The technologies used are constantly being improved, the goods produced are of high quality.
• Work on a preferential taxation system (low tariffs for electricity, cheap raw materials), which allows setting low prices for products.
• A team of highly qualified engineering specialists.
• The ability to increase production volumes without compromising the quality of goods.
• No regional markups.
• Higher quality products compared to last year.
• Serious clients (list).
• Absence of non-target costs, restructuring of production, due to which it is possible to reduce prices for products for end consumers.
• Direct sales (lack of intermediaries).
• The presence of old-school employees who can pass on their rich experience to young professionals.

Competitive advantages of international companies on the example of Toyota

1. High quality products. The main competitive advantage of the company is a top-level car. In Russia in 2015, about 120,000 Toyota cars were purchased. The decisive role of this competitive advantage of the company was voiced by its ex-president Fujio Cho. By purchasing a car from this company, a person can be sure that it was produced using a whole range of modern technological developments.
2. Wide model range. In Toyota showrooms, you can buy any model of a car of this brand: Toyota Corolla (the main advantage is compactness), Toyota Avensis (appreciated for its versatility and comfort), Toyota Prius (new model), Toyota Camry (a whole series of cars is presented), Toyota Verso (family format), Toyota RAV4 (small SUVs), Toyota Land Cruiser 200 and Land Cruiser Prado (popular modern SUVs), Toyota Highlander (all-wheel drive crossovers), Toyota Hiace (distinguished by convenience and compactness). This is also an important competitive advantage: from the models presented, you can choose a car for people with different preferences and financial capabilities.
3. Effective marketing. An excellent competitive advantage of the company is the certification of cars with inspections from Toyota Tested. Those who have purchased a car of this brand in Russia are provided with assistance around the clock, that is, services are constantly working technical support. There is a Trade-In car purchase program that allows you to simplify the process of purchasing a car through advantageous offers from the company.
4. The client comes first. This competitive advantage is also very significant. The company secured it for itself by developing the Personal & Premium program in 2010. It was presented at the international automobile show in Moscow. The program includes advantageous offers for purchasing a car on credit. Employees of the organization New Car Buy Survey found that the loyalty of our compatriots is the highest to Toyota.
5. Effective company management. What is the firm's competitive advantage? She has developed an ERP program that allows to control all sales activities of Toyota cars in Russia online with high efficiency. The year of development of this program is 2003. This is a unique competitive advantage of the company, since this program is combined with the market situation, with various features doing business in Russia, with its current legislation. Toyota has another competitive advantage - the presence of a holistic corporate structure, created to help the company and its partners quickly manage information about the availability of certain models of cars in showrooms, warehouses, etc. In addition, Microsoft Dynamics AX stores all documents on operations performed with cars.

What competitive advantages of the company are called "artificial"

Artificial competitive advantages can be used by a company in the absence of special offers in order to tell about itself.

In what cases is it necessary:

• The set-up of companies competing with the firm is similar (that is, they have the same competitive advantages).
• The company cannot be classified as either small or big business(that is, its assortment portfolio is not very large, there is no narrow focus, and the cost of goods is standard).
• The company is just starting to develop, has not yet developed a customer base, is not very popular among consumers and does not have any special competitive advantages. Basically, this happens when people no longer want to work for someone, they quit and open their own business.

In this case, the development of artificial competitive advantages of the company is required, such as:

Added value. For example, an organization sells computers, while it cannot compete in pricing policy. Then there is the possibility of using such a competitive advantage of the company: installing an operating system and a standard software will allow you to sell equipment at a slightly higher price. This is the added value, which also includes various promotions and bonus programs.

Personal adjustment. It makes sense for a company to have such a competitive advantage if competitors are hiding behind standard clichés. Personal alignment consists of showing the face of the organization and applying the WHY formula. This competitive advantage works effectively in any field of activity.

Responsibility. Differs in efficiency. Excellent is the combination of responsibility with personal alignment. Consumers will be more willing to purchase goods/services knowing that the manufacturer vouches for their quality and safety.

Guarantees. There are two types of guarantees: for circumstances (for example, a guarantee of liability - the provision of goods for free if the cashier does not issue a check) and for a product / service (for example, the possibility of returning or exchanging goods within a certain time after purchase).

Reviews. If they are from real customers. Potential consumers care about the status of people who leave reviews about your company. The advantage works great if the responses are submitted on a special form that has a certified signature of the person.

Demonstration. One of the main competitive advantages of the company. If she does not have any or they are not obvious, then you can create a presentation of your product with illustrations. Service organizations are encouraged to make presentations in video format. The main thing is to correctly focus on the properties of the product.

Cases. The absence of cases is not ruled out, especially for new companies. In this case, the development of artificial cases is possible. Their essence is to provide services to themselves, potential customers or existing ones on the basis of mutual offset. So you will receive a case that demonstrates the level of professionalism of your company.

Unique selling proposition. We have already talked about it above. The meaning of this competitive advantage is that the company operates with some detail or provides information that separates it from competitors. The company "Practicum Group", which conducts various trainings, has unique sales offers. This competitive advantage is efficient.

How to find and correctly describe the main competitive advantages of the company

All businesses have their own advantages. Even if they do not stand out in any way - neither in assortment, nor in prices. Even if you think that your company is completely mediocre, you must definitely understand its advantages. The easiest way to do this is by interviewing your customers. Moreover, their answers may be unexpected and surprising for you.

Someone will explain cooperation with you by the proximity of the location (geographically). Someone trusts you, someone just likes your company. Collecting and analyzing this information in detail will help you increase your income.

But the search for your benefits does not end there. Write down on a piece of paper what your company's strengths and weaknesses are. At the same time, try to be objective. That is, indicate what you have and what you do not yet have. Do not write abstractly, but make your thoughts concrete.

Here are some examples:

Abstraction	specifics
You can rely on us	We guarantee reliability and safety: the amount of cargo insurance is 10 million rubles.
We have high level professionalism	Over 10 years of work, we have implemented 300 projects and gained experience, so we are capable of solving problems that others do not undertake.
Goods quality is high	The technical parameters of our products are 2 times higher than those established by the regulatory documentation.
Individual approach	We guarantee the absence of a brief. We communicate live, studying in detail the nuances of the business.
Top notch service	Our support works every day 24 hours a day. It takes no more than 15 minutes to resolve any issue.
Low prices	The products cost 10% less than the competition, because we produce the raw materials for them ourselves.

Mention, for example, on the site, you need not about all your competitive advantages. Task this stage- find the greatest number of strengths and weaknesses of the enterprise. This is an important starting point.

Then analyze your weaknesses and figure out how you can play them to your advantage. The formula for this is simple:

yes we have "flaw", but this "advantage".

Here are some examples:

Flaw	Turning into an advantage
Office far from the center	This is true, but the warehouse is located here. And there is an opportunity to immediately see the products. Even a truck can easily park with us.
Higher cost of goods than competitors	It is due to the rich equipment. When buying a PC, our specialists will install the operating system and basic software for you. In addition, you will receive a gift.
Long delivery times	Yes, but we supply not only standard parts, but also rare, custom-made.
The company is new to the market and has little experience	Yes, but we are mobile, we work quickly, we show flexibility. We do not have bureaucratic delays (disclose these nuances in detail).
poor assortment	It is, but we specialize in a brand. That is why we know him deeply. Accordingly, our consultations are more useful and better.

The idea is clear. So you can get several types of competitive advantages at once:

• natural(the factual data you have that sets you apart from the competition).
• artificial(amplifiers that also set you apart from competitors - guarantees, individual approach, etc.).
• "Shifters" are your weaknesses turned into advantages. This is an addition to the first two points.

Now you need to rank the identified competitive advantages of the company in such a way that at the bottom of the list are the least significant for consumers, and then edit the list. It should be short, accessible and understandable.

Analysis of the company's competitive advantages and their assessment

Approximately 90% of businessmen do not analyze their competitors, and in fact on its basis it is possible to develop the competitive advantages of the company. There is only an exchange of new technologies, that is, enterprises borrow the ideas of competitors. It doesn’t matter whose innovative idea it was, it will still be used by others.

Thus, the light saw the following clichés:

• Highly qualified specialist.
• Personal approach.
• The highest quality.
• Competitive cost.
• First class service.

There are others, and none of them can actually be called a competitive advantage of the company, since not a single organization will say that it produces a low-quality product, and its staff is staffed with inexperienced specialists.

However, there is another way of looking at it. If enterprises have few competitive advantages, then it will be easier for newcomers to develop and attract potential customers. This gives the audience a wider choice.

Therefore, in order to provide consumers favorable conditions shopping and positive emotions it needs a competent study of competitive advantages in the company's strategy. First of all, the client should be satisfied not with the product, but with the company.

How successful a company's competitive advantages are can be understood by fully evaluating the pros and cons of the company's position in the competition and comparing the results of the assessment with competitors' data. For analysis, you can use the method of exponential assessment of KFU.

With a smart approach to developing a plan of action, it is possible to turn the weaknesses of competitors into your competitive advantages.

What should be analyzed:

1. Is the enterprise stable in protecting its position when the market situation changes in the sphere of its activities, in conditions of fierce competition, in the presence of strong competitive advantages for other firms?
2. Does the firm have effective competitive advantages? Or are they not enough? Or not at all?
3. Is it possible to achieve success in the competition if you follow the existing action plan (what is the position of the company in the competitive system)?
4. How stable is the company at present?

You can analyze the activities of competitors using the method of weighted or unweighted estimates. In the first case, you need to multiply the company's scores for a specific indicator of competitive opportunities (from 1 to 10) by their weight. In the second case, the same significance of all efficiency factors is assumed. The implementation of the competitive advantages of the enterprise is most effective if it has the highest ratings.

The task of specialists at the last stage is to identify strategic mistakes that negatively affect the formation of the company's competitive advantages. For the program to be effective, it is necessary to describe in it ways to resolve any difficult situation.

That is, at this stage, it is necessary to create a single list of problems that need to be urgently solved in order to form the competitive advantages of the company and its strategy. This list is developed on the basis of the results of an assessment of the organization's activities, the market situation and the position of competitors.

To identify the existing problems, you need to answer the following questions:

In what situations will the current program not protect the company from problems - both internal and external?

What level of protection against actions currently taken by competitors does the adopted strategy provide?

Does the current program support competitive advantages, are they combined with it?

How can you lose your company's competitive advantage?

Any competitive advantage has a limited resource, so the company's position in the market depends on how many competitive advantages it has, how significant they are (available to competitors) and how long the life cycle of the competitive advantage is. The more benefits that are unique and hard to replicate, and the longer they last life cycle, the greater the strength of the company's strategic position.

Environmental factors may change, which affects the competitive advantages of the company and may lead to their reduction or even disappearance.

Reasons for losing competitive advantage:

• Deterioration of factor conditions (increase in costs, decrease in the level of education and qualifications of personnel, etc.).
• Decrease in investment attractiveness and innovative potential (it is inevitable if we postpone organizational changes, fearing a reduction in income and not wanting to invest in the future).
• Decreased ability to adapt (bureaucratization, working with obsolete equipment, taking too long to develop new products).
• The weakening of competition (due to the strengthening of the positions of monopolists, the introduction of high duties on imported products by the state).
• The low level of income of the majority of the population, as a result of which people's requirements for the quality and range of goods are reduced.

If you correctly use the company's trademark (brand), you can increase profits and sales, expand the range, inform consumers about the exclusive characteristics of products, stay in this field of activity, introduce effective methods development. Therefore, the brand is a competitive advantage of the company.

If the manager does not realize this, then he will not be able to bring his company to the leaders. But a trademark is a very expensive competitive advantage. To implement it, you need to have special management skills and experience with the brand, to know how to position the company.

A trademark is developed in several stages:

Stage 1. Goal setting:

• goals and objectives of the company are formulated (this stage takes place when all competitive advantages are formed);
• establishes how significant the brand is within the firm;
• the position of the brand is established (parameters, long-term, competitive advantages of the company);
• measurable brand criteria (KPIs) are defined.

Stage 2. Development planning:

• the available resources are evaluated (a single stage for the process of forming any competitive advantage);
• customers and performers are approved;
• terms of development are determined;
• additional goals or obstacles are identified.

Stage 3. Assessment of the current position of the brand (for existing brands):

• how popular it is among consumers;
• Are potential buyers aware of it?
• whether potential customers are attracted to the brand;
• What is the level of brand loyalty?

Stage 4. Assessment of the state of affairs in the market:

• competitors are evaluated (the first stage in the formation of any competitive advantage of the company);
• potential customers are evaluated (based on the study of their preferences and needs);
• the sales market is estimated (supply, demand, development).

Stage 5. The wording of the essence of the brand:

• the purpose, position and benefits of the brand for potential customers are determined;
• exclusivity of the brand is revealed (competitive advantages, value, features);
• brand attributes (components, appearance, main idea) are being developed.

Stage 6. Brand Management Planning:

• marketing elements are developed, the brand management process is explained (fixed in the brand book);
• responsible for brand promotion are appointed.

Stage 7. Introduction and brand awareness (this stage determines whether the company's competitive advantage in terms of brand promotion will be successful):

• a media plan is drawn up;
• Producing and distributing promotional materials;
• multifunctional loyalty programs are being developed.

Stage 8. Analysis of the effectiveness of the brand and the work done:

• evaluated quantitative parameters brand (KPI) established at the first stage;
• actual results are compared with the planned ones;
• strategy is adjusted.

6 Common Mistakes in Building a Competitive Advantage for Companies

1. Lack of specificity.

Use of marketing clichés and hackneyed phrases, compliance with generally accepted rules, lack of specific focus on certain products.

Do not use such hackneyed wording:

“Our content is unique.”

“We are the best.”

“We have the highest quality goods.”

“Only we have a huge selection of goods.”

Offering SUCH competitive advantages to your audience means showing disrespect to it. Do not expect your competitors to present their advantages differently, call their product ordinary, recognize the average level of its quality and declare that the assortment is not large enough.

2. Anonymity.

An anonymous statement implies the impossibility of identifying its author and understanding on what grounds it was made. For example: "We sell the best quality products in town." Whose claim is this and where is the evidence for it?

3. Unsubstantiated.

Remember that your unsubstantiated and lack of concrete facts are a reason for buyers not to trust you. In this case, it is possible to avoid losing a client only if he is loyal to the product, brand, manufacturer, store, etc.

4. Unable to verify.

That is, the statements of the consultant / sales manager cannot be verified at the moment, or they cannot be verified in principle. For example: "Our company is the only one ...".

5. Lack of comparison.

Use as evidence of specific facts, values ​​of indicators, but without comparison. And an advantage is something better than anything. For example: "The raw materials for our products are environmentally friendly materials."

6. Addresslessness.

Every competitive advantage has both pros and cons. It depends on which side you look at it from. It will not be effective if it is not clearly defined for whom it is intended. For example: “Our speakers have a stylish design. We recommend paying attention to them. This series is more refined than its counterpart, produced by X. Although the product is compared with other analogues, however, there is no targeting.

Marketers when promoting goods and services, as a rule, exalt their merits. But in a highly competitive environment, this is not enough. The production capabilities of competing companies are approximately the same, so the fight for the consumer is won by the one who spends money not so much on unique technologies as on meeting the needs of customers.

In this article you will read:

• Where is the “center of gravity” for business and why should it be shifted
• How to ensure the effective use and evaluation of the competitive advantages of the enterprise
• How to increase sales when the market is stagnating
• How to Quadruple Revenue with Pass-and-Link Adoption

Leveraging Competitive Advantages with a competent approach, it ensures the success of the company. However, the main difficulty in this matter is the effective assessment of the competitive advantages of the enterprise, the purpose of which is the correct definition of the "center of gravity".

Best Article of the Month

We have prepared an article that:

✩show how tracking programs help protect the company from theft;

✩ tell you what managers actually do during working hours;

✩explain how to organize surveillance of employees so as not to break the law.

With the help of the proposed tools, you will be able to control managers without reducing motivation.

Customers choose not the product itself, but rather what accompanies the purchase - intangible, but important values ​​(trust in the brand, reliability of delivery, quality of service, etc.). To understand how well organized the use of competitive advantages in your company, ask yourself three questions.

1. Do you spend most of your costs - on production and R&D, or on attracting and retaining customers?

2. Why do consumers value your company the most?

3. Is your competitive advantage based on the product itself or on effective interaction with customers?

By answering these questions and understanding where the “center of gravity” of your company is compared to other players in the market, you can determine the degree of your competitiveness and the main vector of business development. It is important to remember one thing: those companies that have not yet had time to reorient themselves to consumer values ​​will soon face product depersonalization, lower revenues, an outflow of customers and a decrease in influence in the industry. And those firms that can shift the "center of gravity" from the product to the consumer will become leaders.

Example 1. Added value of a product

Nestlé has been a leader in the coffee industry for many years. However, at the end of the 20th century, competing products became similar to each other, and consumers of instant coffee stopped paying attention to brands. In the struggle for buyers others big players- Tesco, Procter & Gamble, Starbucks and others - waged a price war among themselves and sought to lure coffee lovers to themselves in various ways.

Despite the tough competition, the new CEO of Nestlé decided to increase sales growth from 2% to 4%. It was impossible to do this at the expense of the existing product - then the management created a new product with additional consumer value.

What are consumers willing to pay for? In 1974, the company acquired a patent for the production of the Nespresso coffee machine and for 25 years brought this system to perfection, eliminating shortcomings and bringing it to the market. Until the beginning of the 21st century, this product was not widely in demand. However, when a new consumer trend appeared on the market - gourmet coffee - Nestlé decided that this particular product would help strengthen its position in the industry and overtake competitors.

• Information about competitors: 3 rules for collecting and using it

Any owner of a coffee machine could brew quality espresso at home using aluminum capsules. Thanks to this, it was not necessary to constantly clean the machine from the remnants of ground coffee. This became the additional customer value for which buyers were willing to pay.

How to position a new product. They decided to present the coffee machine as a premium product for making coffee at home. Such an approach was unusual for a company that usually sold mass consumer goods in large quantities in retail chains and at a low cost, using wide advertising campaigns. However, to develop a new market, it was necessary to change not only the distribution of the product, but also the interaction with customers.

Coffee machines could be purchased in large shopping malls and specialized stores of household appliances. However, the capsules were sold only in the Nespresso Club - a community of users who registered on a specialized site. Due to the fact that each buyer left his contact information when ordering, the company was able to manage consumer behavior and find out the answer to the main marketing question: who, when and at what price buys a product?

The company's executives are confident that it is the consumer club (12 million users) that is its main competitive advantage, preventing other players from conquering the coffee industry.

Result. Today, the share of coffee capsules accounts for 20 to 40% of the financial volume of the European coffee market, whose size is estimated at $17 billion. Annually this segment is growing by 30% worldwide. The company's customer focus has increased markedly: 70% of employees have personal contact with customers who order capsules on the brand's website.

Example 2. No risk when buying

Ask yourself: "Why don't potential customers buy from us?". After all, the likely target audience is those people or companies that should become your customers, but for some reason prefer competitors. Perhaps it's all about the costs or risks of the purchase. If you remove these barriers and give buyers a great deal, chances are they will choose you. Remember, the consumer is willing to pay a fairly high price for reducing their risks.

• Risk Management: 13 Practical Steps

How to solve a problem. During the 2008–2009 crisis, car sales fell heavily around the world, especially in the US. Many automakers (such as General Motors and Chrysler) have been forced to cut prices and make huge discounts. Hyundai also suffered significant losses as its vehicles target lower-middle-income consumers. But there was a way out.

The company understood why people stopped buying: they were simply afraid that they would not be able to pay off the car loan on time. Then in January 2009, the company announced that it would minimize the risks when buying a car. If the buyer lost his job or income within a year of the purchase, he could return the product and this did not affect his credit history in any way.

Result. In the first month of the program, the company's sales almost doubled, while industry-wide revenue fell by 37%. Hyndai sold more vehicles than Chrysler, which had a dealer network four times larger.

Example 3. Picture of consumer behavior

Marketers create as detailed a portrait of each consumer as possible by memorizing their preferences. On the one hand, this allows you to fairly accurately predict what and when a particular client will buy, as well as control his behavior. On the other hand, today these weapons are used by very many companies. Therefore, you and your competitors will spend a lot of money and time trying to lure customers from each other.

Instead of carefully crafting a customer profile and chasing their next order, try to identify the relationship between consumer behavior in media space and buying habits. This will help track the actions of buyers, analyze their brand loyalty and evaluate their impact on other consumers.

• Competitors in trade: how to protect your ideas

Such market information can be turned into additional customer value using, for example, the “pass and link” technique. It allows, in particular, to learn from one client and use this knowledge to help another. Thus, you are, as it were, an intermediary between two parties who can benefit from acquaintance.

How to use the information. Amazon, which started as a bookstore, has become one of the largest online marketplaces in the world in just 15 years, bringing together many large-scale companies from other industries. The reason is that on Amazon, you can not only buy anything, but also get detailed information about each product that is not available in traditional stores, get the opinion of other buyers, and also understand what people with similar tastes are buying.

• Competitive intelligence: how to beat everyone with creativity

This additional customer value is in demand among 200 million people in the world. Because Amazon analyzes each customer's shopping history and correlates it with data from other consumers, the company gets an overall picture of shopping behavior and, based on it, makes accurate, targeted recommendations for each visitor.

Result. Since 2006, Amazon's revenue of just over $10 billion has quadrupled against the backdrop of a deep recession in the US. And since 2005 in annual ranking ForeSee "Customer Satisfaction" company ranks first or second in the online shopping category. Second on the list is Netflix, whose recommendation system, like Amazon's, has become a long-term competitive advantage.

Davar N. Ideal marketing: what 98% of marketers forgot about / [Trans. from English]. - M.: Alpina Publisher, 2015. - 214 p.

The world does not stand still, information is constantly updated, and market participants are in search marketing ideas, ways of doing business, new views on your product. Any business is tested for strength by competitors, therefore, when developing a development strategy, it is reasonable to take into account their influence, market share, position 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 profit level. Competitive advantage is achieved by providing the client with more services, better products, relative cheapness of goods and other qualities.

Competitive advantage for business provides:

– prospects for long-term growth;

– work stability;

- getting a higher rate of profit from the sale of goods;

- creating barriers for new players to enter the market.

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 product of a competitor.

What are the types of competitive advantages

What allows you to create competitive advantages for 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 goods. Buyers often prefer to buy a product only because of its cheapness relative to other offers with similar properties. Due to the cheapness of the product, it can be purchased even if it does not represent a special consumer value for buyers.

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

If a company creates competitive advantages for its product, it can only highlight its position in the market. This can be achieved by monopolizing part of the market. True, such a situation is contrary to 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 retain it for a long time.

4 criteria for assessing competitive advantages

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

Uniqueness. Competitive advantage should distinguish the product from competitors, and not repeat 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.

Competitive Advantage Strategies

1. Cost leadership. Thanks to this strategy, the company generates revenues above the industry average due to the low cost of its production, despite high competition. When a company receives a higher rate of return, it can reinvest these funds to support the product, inform about it, or outperform competitors due to lower prices. Low costs provide protection from competitors, as revenue is maintained in conditions that other market participants are not available. Where can you use a cost leadership strategy? This strategy is applied when economies of scale or when the 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 with a high proportion of consumers who are price sensitive.

• Information about competitors: 3 rules for collecting and using it

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

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 the accumulated experience;

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

- the company provides for scrupulous management of the level of its reserves;

– strict control over invoices and production costs refusing 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 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 are not yet satisfied by suppliers.

2. Differentiation. The company, when working with this strategy, provides unique properties for its product, which are important for the target audience. Therefore, they allow you to set a higher price on the product compared to competitors.

Product leadership strategy requires:

- the product must have unique properties;

- the ability to create a reputation for high quality product;

– high qualification of employees;

- ability to protect competitive advantage.

The advantage lies in 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 assortment building, 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;

- the product may lose its uniqueness when copying the advantages of cheaper products.

This strategy is used for saturated markets by companies that are ready for high investment 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 is to protect against major competitors and substitute products. In this case, it is possible to achieve a high rate of return due to more effective satisfaction of the needs of a narrow audience of consumers. This strategy can be built on competitive advantages of any type - on the breadth of the proposed 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 for product development, which is a chance for the survival of small enterprises.

Risks and disadvantages of using a focus strategy:

- there is a high probability of large differences in prices for goods compared to the leading brands of the market, which may scare away their target audience;

- the attention of large market participants is switched 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, with high costs or non-competitiveness in terms of costs in comparison with market leaders.

Three stages of service strategy

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

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

III stage. Requirement. For consumers, this proposal becomes an integral element of a service or product, moving into the category of standards.

How to check the level of service in your company

• Conducting informal surveys. The CEO and other managers need to understand the opinion of consumers about the proposed service.
• Conducting formal surveys (focus groups). It will be rational to involve both consumers and representatives of all departments of your company for these events.
• Engage third-party consultants to interview company employees. Thanks to external consultants, the importance of answers increases (with more candid answers).

How to improve the service

Tatiana Grigorenko, managing partner of 4B Solutions, Moscow

Consider general tips to improve the service in the work of companies.

1. Surprise, influence emotions. Usually visitors in the office are offered tea bags 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 teas with branded chocolate for dessert.

2. Break the rules. In the modern market it is inefficient to be like everyone else, you need to be better than the rest.

3. Listen to your customers. Do you need to ask your customers what they would be interested in?

How to create competitive advantage

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

1) Uniqueness.

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

3) Uniqueness.

4) Credibility.

5) Attractiveness.

6) Have Reasons to Believe (a basis for trust). Concrete grounds that will make buyers believe.

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

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

9) Brevity. Must fit in a sentence of 30 seconds.

Step #1. Compiling a list of all benefits

The benefits of the product are sought as follows:

– we are interested in buyers, what competitive advantages they hope to get at the expense of 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 be said about the product:

– functionality;

– brand symbolism: logo, name, form style;

– appearance: packaging, design;

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

– service and support;

- assortment, variety.

2) Price

What can be said about the price:

– price strategy for entering the market;

– retail price: the selling price of the product must necessarily be related to 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 the specific link in the supply chain, a specific supplier;

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

– policy regarding the conduct of promotional events;

- Availability seasonal promotions or discounts;

- Possibility of price discrimination.

3) Place of sale

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

What can be said about the sale meta:

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

– distribution channels for the sale of goods;

– type and conditions of distribution;

– conditions and rules for the display of goods;

- Logistics and inventory management issues.

4) Promotion

Promotion in this case involves everything Marketing communications to attract the attention of the target audience to the product, with the formation of knowledge about the product and key properties, the formation of the need to purchase the product and repeat purchases.

What can be said about the promotion:

– promotion strategy: pull or push. With the Push strategy, it is supposed to push the goods through the trading 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 ​​of knowledge, brand loyalty and consumption by their target audience;

– required marketing budget, SOV in the segment;

- the geography of their communication;

– communication channels for contact with consumers;

– participation in specialized shows and events;

- brand media strategy

– PR-strategy;

– promotions for the next year, events aimed at sales promotion.

5) People

– employees who represent your product and company;

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

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

- manufacturers, on which the quality and price of the goods may depend;

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

What can you say about working with people:

- programs for the formation of 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 their sales staff;

- Methods for collecting feedback.

6) Process

This one applies to the service market and the B2B market. Under the "process" refers to the interaction of the company and consumers. It is this interaction that is the basis of buying 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 customers. The goal is to provide the most comfortable conditions for buyers when purchasing and using the offered service.

7) Physical environment

This also applies to the service market and B2B. This term describes what surrounds the buyer during the purchase of the 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 of no value;

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

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

Step #3. Compare list of benefits with competitors

The resulting list of characteristics should be compared with its competitors according to two principles: the presence of this property in a competitor, whether the condition is better for a competitor or for you.

Step number 4. Look for absolute competitive advantages

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

- the product is unique in one or several properties;

– uniqueness by combination of properties;

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

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

– features appearance, form, packaging, method of sale or delivery;

– creation and implementation of innovations;

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

- qualification of personnel and the uniqueness of its human capital;

- the ability to ensure the minimum cost in their industry, while assuming a higher profit;

– special conditions sales, after-sales service for consumers;

- access to limited raw materials, resources.

Step number 5. Look for "false" competitive advantages

First mover. Declare the properties of competitors' products first, while they have not yet informed their target audience about them;

Efficiency indicator. Creating your own performance evaluation indicator;

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

Step number 6. Make a development and control plan

After identifying a competitive advantage, you need to form two further marketing action plans - a plan to develop your competitive advantage over the next few years and a plan to maintain 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 evaluation, a three-point scale is best suited, according to which are put:

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 plan of action aimed at improving the competitive advantage of the company. It is necessary to plan improvements on the points of assessment, which were given less than three points.

How to develop competitive advantages

Competitive behavior in the market can be of three types:

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

Adaptive. Accounting for innovative changes in production, ahead of competitors in relation to the modernization of production;

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

The duration of retention of competitive advantages depends on:

source of competitive advantage. Can be a competitive advantage of high and low order. The advantage of a low order 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, searching for their sources of these advantages. The advantage in the form of cheap labor can also lead to negative consequences for the enterprise. With low salaries for repairmen, drivers, they can be poached by competitors. The advantages of a high order are the excellent reputation of the company, specially trained personnel, production and technical base.

The number of clear sources of competitive advantage in the enterprise. A greater number of competitive advantages at the enterprise will seriously complicate the tasks of its pursuers-competitors;

Constant modernization of production.

How to survive the crisis and maintain competitive advantages

Alexander Idrisov, Managing Partner, StrategyPartners, Moscow

1. Keep your finger on the pulse of events. Some 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 study the business model of your company. 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 teaming up 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 touch with investors, it is better to activate them if possible.

Information about the author and company

Alexander Maryenko, Project Manager of A Dan Dzo Group of Companies, Moscow. Graduated from the Faculty of Finance of the Nizhny Novgorod state university. Participated in projects (more than 10, of which six - as a manager) aimed at increasing the profitability of companies' businesses and solving their systemic problems.

John Shoal, President of ServiceQualityInstitute, Minneapolis (Minnesota, USA). It is considered the founder of the service strategy. At the age of 25, he founded a firm specializing in educating companies about a culture of service. Author of five bestsellers on the topic of service, translated into 11 languages ​​and sold in more than 40 countries.

ServiceQualityInstitute formed by John Shoal in 1972. Specializes in the development and implementation of service strategies in companies. More than 2 million people have been trained by ServiceQualityInstitute specialists. The main office is located in Minneapolis, branches - around 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 - improvement of customer service systems, anti-crisis management, professional legal and accounting business support. The staff of the company is over 20 people. Among the clients are the Association of Business Aviation, Triol Corporation, Rafamet Machine Tool Plant (Poland), ANCS Group, IFR Monitoring, MediaArtsGroup, Gaastra chain of boutiques.

Alexander Idrisov, Managing Partner of StrategyPartners, Moscow.

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