What are the advantages of the company. Formation of the company's competitive advantages: a step-by-step plan
For successful work an enterprise in the market, it needs to have an advantage over organizations that produce similar products or provide similar services. Competitive advantage is a concentrated manifestation of superiority over competitors in various areas of a particular organization, measured by economic as well as financial indicators. It should not be understood as a potential opportunity of the enterprise. This is not a possibility, but a fact that takes place as a result of the real preferences of a certain circle of buyers. In business, competitive advantage is one of the main, main goals and results. economic activity enterprises. To achieve this goal, the efforts of the entire team of the organization are necessary.
A competitive advantage can appear if your enterprise has a low cost of goods or services, a high level of product differentiation, optimal implementation of innovations, and a fairly quick response to market needs. It includes labor productivity and staff qualifications, high professionalism of managers, and a high level of strategic management.
Competitive advantage is comparative in nature because it can only be identified by affecting sales performance.
The number of preferred choices by respondents can serve as a reflection of the rating of the product, which is the result of marketing analysis.
In a special position are products that have unique characteristics that have no analogues. Such goods, having absolute competitive advantages, have (in addition to their unique value) also the fact that they overcome the boundaries of competition for some time and are monopolists in the market. But this type of state-supported monopoly is reinforced by patenting new product features. These absolute advantages will create an additional incentive for scientific and technological development, which will help develop competition.
The competitive advantage of any economic object cannot be universal, it can only be relative.
To achieve it, a whole range of measures is needed, however, and they may turn out to be insufficient, since external factors may turn out to be stronger.
It is precisely the analysis of the influence of various factors on the organization that Porter's theory of competitive advantages is devoted to. In International Competition (1990) he came to the following conclusion: the global competitive advantages of national enterprises depend most of all on the macroeconomic and social environment their work in the country. The macroenvironment is determined not only by production factors, but also by such factors as demand in the domestic market; development of related industries; the level of management in the country; the level of competition; government economic policy; random events (war, unexpected discoveries, and others). The presence of these six factors largely determines the competitive advantages of organizations, industries and countries in the global market.
Course work
Competitive advantages of the enterprise
Introduction
1. Theoretical basis competitive advantages of the enterprise
1.1 The concept and essence of competitive advantages
2.2 Organizational structure of OJSC “Arnest”
Conclusion
Since a typical mistake in the analysis of this problem is the confusion of the concepts of competitiveness and competitive advantage, therefore, we will clarify these concepts.
“The competitiveness of a product is an integral comparative characteristic of a product, a comprehensive assessment of its parameters (consumer, economic, organizational and commercial) in relation to market requirements or parameters of similar products. The real competitiveness of a product is determined only by comparing its parameters that are significant for consumers with the characteristics and terms of sale of similar competing products. ”
“Competitiveness is a property of an object, characterized by the degree of actual or potential satisfaction of a specific need by it in comparison with similar objects presented on the market. Competitiveness determines the ability to withstand competition in comparison with similar objects in a given market. ”
Competitiveness of the company - the ability to compete in the market with other manufacturers and suppliers of similar products, both in terms of the degree to which their goods or services meet the specific needs of customers, and in terms of business efficiency. It is most often evaluated by the company's specialists, and competitive advantages are evaluated by consumers who compare the offers of the company and its competitors. In this sense, the concept of competitive advantage is also relative. Competitive advantages make it possible to achieve greater consumer loyalty; accordingly, they largely determine the company's competition strategy, i.e. the way she competes.
“Competitive advantage is distinctive features company and its product in the eyes of consumers. ”
“Competitive advantages of subjects can be hereditary, constructive, technological, informational, qualification, managerial, natural and climatic, etc.”
“The competitive advantage of a system is any exclusive value that a system possesses that gives it superiority over its competitors. ”
“Key competitive success factors are commonly referred to as factors arising from market requirements that can give the company an advantage over its competitors. ”
“Rivalry among existing competitors often comes down to striving to achieve an advantageous position by all means, using the tactics of price competition, promotion of the product on the market and intensive advertising. “
“Knowledge of the company's capabilities and sources of competitive influence will allow you to identify areas where the company can go into open confrontation with competitors, and where it can avoid it. If a company is a low-cost producer, it will be able to oppose the power of consumers because it will be able to sell them products that are not vulnerable to substitute products. ”
The sources of competitive advantage are diverse, but most often they are based on:
On operational efficiency, i.e. performing similar activities better than competitors (quality of service or product quality, hours of operation and location, speed of service, cost advantage, etc.);
Strategic positioning, i.e. carrying out activities that are separate from competitors or carrying out similar activities, but in other ways. Strategic positioning is based on a competitive advantage (key competitive advantage). This may be the uniqueness of a product or service, brand image, technological leadership, a unique combination of activities, etc.
So, the company's offer must be meaningful to consumers in order to be classified as a competitive advantage. However, the degree of significance varies.
“For a particular factor to become a competitive advantage for a company, it must be of key importance to consumers and at the same time be based on the uniqueness of the company's business. ”
The most cited author in foreign and domestic literature on the theory of competition, management of competitive advantages is M. Porter. In the next paragraph of the course work, Michael Porter's theory of competitive advantage will be considered.
1.2 Michael Porter's Theory of Competitive Advantage
To survive or win in tough competition, any system must have certain advantages over its competitors. In recent years, almost every book on competition, competitive advantage, or competitiveness has referenced Michael Porter's seminal book International Competition.
M. Porter proposed a set of typical strategies based on the idea that each of them is based on a competitive advantage and the company must achieve it by choosing its own strategy. It must decide what type of competitive advantage it wants to gain and in what area.
“Thus, the first component of the strategic choice under this model is a competitive advantage, which is divided into two main types: lower costs and product differentiation. ”
“Low costs reflect a firm's ability to develop, produce, and sell a comparable product at a lower cost than a competitor. Selling goods at the same (or approximately the same) price as competitors, the company in this case receives a large profit. ”
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. Differentiation allows the firm to dictate high prices, which, at equal costs with competitors, provides greater profits.
Difficult, but still possible to gain a competitive advantage based on both lower costs and differentiation. However, any effective strategy must pay attention to all types of competitive advantage, although not strictly adhering to one of them. A firm focusing on low costs must still provide acceptable quality and service. In the same way, the product of a differentiated firm must not be so expensive as to be detrimental to the firm.
“The competitive advantage of a firm is determined by how clearly it can organize relationships with suppliers and customers. By better organizing these connections, the firm can gain a competitive advantage. Regular and timely deliveries can reduce a firm's operating costs and reduce inventory requirements. These links occur when the method of one activity affects the cost or efficiency of others. »
Relationships often lead to the fact that the additional costs of "fitting" individual activities to each other pay off in the future. Firms must incur such costs in line with their strategy in the name of competitive advantage.
M. Porter notes that firms get a competitive advantage:
Based in those countries that allow the most rapid accumulation of specialized resources and skills;
If the home country of the firm has more accessible and accurate information about the needs for goods and technologies;
If permanent investment is possible;
If the interests of owners, managers and staff coincide.
“Thus, one of the main goals of many organizations is to achieve an advantage over its direct competitors. The central question is this: how will the organization obtain this advantage? M. Porter answers this important question by highlighting key general strategies. ”
Three such strategies are cost leadership, individualization, and focus. Each of them will be discussed in the next section of the course work.
1.3 Strategies for achieving competitive advantage according to M. Porter
Strategies for achieving competitive advantages belong to the group of competitive strategies, which also include strategies for behavior in a competitive environment. Each of these strategies is based on the need to achieve a certain competitive advantage.
“Competitive advantages here are understood as the unique tangible or intangible assets of the company or special competence in areas of activity that are important for this business (equipment, trademark, ownership of raw materials, flexibility, adaptability, staff qualifications, etc.). ”
Note that the competitive advantages of modern firms do not always relate to production technology, very often they move to the stage of marketing, service, R&D, managerial and financial innovations. Competitive advantages are usually realized at the level of strategic business units. Consider the features of the main strategies for achieving competitive advantages.
Analysis of the competitive environment and determination of the competitive position of the organization involves determining the complexity and dynamism of the competitive environment. The universal methods of such analysis are the five forces model of M. Porter and the cost analysis of competitors.
The five forces model involves conducting a structural analysis based on determining the intensity of competition and studying the threat of potential competitors entering the market, the power of buyers, the power of suppliers, the threat from substitutes for a product or service.
Competitor cost analysis boils down to identifying the strategic factors driving cost, cost analysis itself, and competitor cost modeling.
“To obtain a competitive advantage, a firm can use three general competitive strategies: cost leadership (the task is to achieve cost leadership in a particular area through a set of measures to control them), individualization (it is supposed to achieve a product or service organization's distinctness from competitors' products or services). in this area), focusing (the task is to focus on a specific group, market segment or geographic region). ”
Cost Leadership. When implementing this strategy, the task is to achieve leadership in terms of costs in their industry through a set of functional measures aimed at solving this particular problem. As a strategy, it involves tight control over costs and overheads, minimizing spending in areas such as research and development, advertising, etc. There is also a need for a whole layer of buyers who feel the advantage of low costs, expressed in prices.
A low cost position gives an organization good returns in its industry even if there is fierce competition in its industry. A cost leadership strategy often creates new foundation for competition in those industries where fierce competition in various forms has already been established.
Individualization. This strategy involves differentiating an organization's product or service from those offered by competitors in the industry. As Porter shows, the individualization approach can take various forms including image, brand, technology, identity, special customer service, etc.
Customization requires serious research and development as well as marketing. In addition, buyers should give their liking to any product as something unique. The potential risk of the strategy is a change in the market or the release of analogues, which can be initiated by competitors, which will destroy any competitive advantage that the company has already achieved.
“A focus strategy involves choosing a narrow segment or group of segments in an industry and meeting the needs of that segment more effectively than competitors serving a broader market segment can do. The focus strategy can be applied by both the cost leader serving a given segment and the differentiator that meets the special requirements of a market segment in a way that allows for high pricing. ”
So firms can compete broadly (serving multiple segments) or focus narrowly (targeted action). Both options for the focus strategy are based on the differences between the target and the rest of the industry segments. It is these differences that can be called the reason for the formation of a segment that is poorly served by competitors that carry out large-scale activities and do not have the ability to adapt to the specific needs of this segment. A cost-focused firm may outperform a consumer-oriented firm by its ability to eliminate "excesses" that are not valued in that segment.
If this strategy is chosen, the main task is to concentrate on a specific group of consumers, a market segment or a geographically isolated market. The idea is to serve a specific target well, not the industry as a whole.
It is assumed that the organization will thus be able to serve a narrow target group better than its competitors. This position provides protection against all competitive forces. Focusing can also mean cost leadership or product/service customization.
1.4 Strategies for achieving competitive advantage according to F. Kotler
F. Kotler offers his own classification of competitive strategies based on the market share owned by the enterprise (firm):
1. "Leader" strategy. The “leading” firm in the product market occupies a dominant position, and this is also recognized by its competitors. The leading firm has a set of strategic alternatives at its disposal:
The expansion of primary demand, aimed at discovering new consumers of the product, expanding the scope of its use, increasing the one-time use of the product, which is usually advisable to apply at the initial stages of the product life cycle the defensive strategy that the innovator takes to protect its market share from the most dangerous competitors;
An offensive strategy, most often consisting in increasing profitability by maximizing the experience effect. However, as practice shows, there is a certain limit, above which a further increase in market share becomes unprofitable;
A demarketing strategy that involves reducing one's market share in order to avoid accusations of monopoly.
2. "Challenge" strategy. A firm that does not occupy a dominant position can attack the leader, i.e. challenge him. The purpose of this strategy is to take the place of the leader. In this case, the solution of two most important tasks becomes key: choosing a springboard for attacking the leader and assessing the possibilities of his reaction and defense.
3. The strategy of “following the leader”. A “follow-the-leader” is a competitor with a small market share that chooses adaptive behavior, aligning its decisions with the decisions made by competitors. Such a strategy is most typical for small businesses, so let's take a closer look at possible strategic alternatives that provide small businesses with the most acceptable level of profitability.
Creative market segmentation. A small firm should only focus on certain market segments in which it can better exercise its competence or have greater agility to avoid major competitors.
Use R&D effectively. Since small enterprises cannot compete with large firms in the field of fundamental research, they must focus R&D on improving technologies in order to reduce costs.
Stay small. Successful small businesses focus on profit rather than increasing sales or market share, and they tend to specialize rather than diversify.
Strong leader. The influence of the manager in such firms goes beyond formulating a strategy and communicating it to employees, covering also the management of the current activities of the company.
4. Specialist strategy, “Specialist” focuses mainly on only one or several market segments, i.e. he is more interested in the qualitative side of the market share.
It seems that this strategy is most closely associated with the focusing strategy of M. Porter. Moreover, despite the fact that the “specialist” firm dominates its market niche in a certain way, from the point of view of the market for this product (in the broad sense) as a whole, it must simultaneously implement the strategy of “following the leader”.
1.5 Classification of competitive advantages of the organization
The management of the competitive advantages of the enterprise is carried out according to the same management (management) functions as the management of other objects.
“The factors of competitive advantage of the organization are divided into external, the manifestation of which to a small extent depends on the organization, and internal, almost entirely determined by the management of the organization. »
Table 1.1 List of external factors of competitive advantage of the organization
| External factor of competitive advantage of the organization | What needs to be done to achieve and use a competitive advantage in Russia |
| Country competitiveness level | Open an organization in a country with a high level of competitiveness or increase the competitiveness of your country |
| The level of industry competitiveness | Take measures to increase the competitiveness of the industry or leave it for another, more competitive industry |
| The level of competitiveness of the region | Take measures to increase the competitiveness of the region or leave it for another, more competitive region |
| State support for small and medium-sized businesses in the country and regions | recycle legislative framework for small and medium-sized businesses, focusing it on efficient and law-abiding business conduct |
| Legal regulation of the functioning of the economy of the country and regions | Rework the legislative framework for the functioning of the economy as a system of codes and rights (competitive, antimonopoly, administrative, labor, etc.) |
| Openness of society and markets | Development of international cooperation and integration, international free competition |
| The scientific level of economic management of the country, industry, region, etc., the applicability of the tools of the new economy | Application of the economic laws of the functioning of market relations considered in topics 2-5, the laws of organization in statics and dynamics, 20 scientific approaches to management and specific principles for managing various objects, management methods at all levels of the hierarchy. If the leader does not master scientific methods, the performer will hardly master them. |
| National system of standardization and certification | Activation of work in this area, strengthening control over compliance with international standards and agreements, legal support for harmonization with the international system |
| State support for human development | To increase dozens of times in the Russian budget spending on education, healthcare and the social sphere |
| State support for science and innovation | Improve the transfer system (development of innovations, their innovation and diffusion), increase budget spending on science tenfold |
| The quality of management information support at all levels of the hierarchy | Creation of unified national information centers for areas or industries National economy, corresponding last word science and technology |
| The level of integration within the country and within the global community | Russia's entry into international organizations and development according to international laws |
| Tax rates in the country and regions | Revise the tax system, if possible, dock and unify rates |
| Interest rates in the country and regions | Revisit the system interest rates at all levels of management and areas of investment |
| Availability of accessible and cheap natural resources | To increase the proportion of state-owned resources mined and subsoil to at least 50%. Improve government control over resource spending |
| The system of training and retraining of managerial personnel in the country | The receipt of international, state and sponsor investments in this area and their spending should be under state control and give a specific result. |
| Climatic conditions and geographical location of the country or region | Protect the environment natural environment, improve the quality of the living environment and develop competitive advantages in this area |
| The level of competition in all areas of activity in the country | Comprehensively form and implement market relations |
Table 1.2 List of internal factors of the competitive advantage of the organization
| Internal factor of competitive advantage of the organization | What needs to be done to achieve and use competitive advantage |
| production structure of the organization | Design organizations based on flexible production systems, from automated modules and systems |
| mission of the organization | The mission should contain an original idea, an exclusive field of activity, a competitive product, a popular trademark, a brand, etc. |
| organizational structure of the organization | The organizational structure should be built on the basis of the organization's goal tree with horizontal coordination of all work by the manager for a specific product (problem-target organizational structure) |
| Production specialization | Carry out the design of the organization based on the analysis of the principles of rationalization of structures and processes, using modeling methods |
| the level of unification and standardization of products and components of production | Perform the whole range of work on the unification and standardization of various objects in order to streamline them according to standard sizes, types, methods, etc. |
| accounting and regulation of production processes | Include in the structure of the organization automation tools for accounting for compliance with the principles of proportionality, continuity, parallelism, rhythm of the flow of individual processes |
| staff | Constantly select personnel, improve their qualifications and create conditions for promotion, motivate high-quality and efficient work in order to ensure the competitiveness of personnel |
| information and normative-methodical base of management | When designing and developing structures, information systems should include high-quality information and regulatory and methodological documents |
| the strength of competition at the output and input of the system | When choosing a field of activity and suppliers of raw materials, materials, components, equipment, personnel, analyze the strength of competition and choose competitive suppliers |
Resource: suppliers access to high-quality cheap raw materials and other resources |
Constantly analyze the competitive environment, the number of suppliers, the strength of competition between them, their competitiveness to select the best. Monitor market parameters in order not to miss possible access to high-quality and cheap raw materials |
| accounting and analysis of the use of all types of resources at all stages of the life cycle of large objects of the organization | Stimulate the conduct of such an analysis, since in the future, saving resources for consumers of their products will be a priority for the organization, a factor of competitive advantage |
| resource efficiency optimization | Support work on resource optimization, as the global goal of competition is to save resources and improve the quality of life |
| Technical: proprietary goods | Continue to work on increasing the number of inventions and patents |
| patented technology and equipment | To increase the proportion of progressive technological equipment, to reduce its average age |
| quality of workmanship | Apply modern methods of quality control and promotion to maintain a competitive advantage |
| Managerial: managers | Increase the proportion of competitive managers |
| analysis of the implementation of the laws of the organization | Based on the results of the analysis of the laws of the organization, measures should be developed and implemented to improve processes |
| organization of the supply of raw materials, materials, according to the principle of "just in time" | Maintaining this competitive advantage requires a high degree of discipline throughout the entire material cycle. |
| functioning of the management system (competitiveness) of the organization | Develop and implement a system |
| functioning of the quality management system in the organization | Further retention of this competitive advantage requires highly qualified personnel, the use of scientific management methods |
| conducting internal and external certification of products and systems | The quality management system must comply with international standards ISO 9000:2000. scientific approaches and principles of quality management |
| Market: access to the market for resources needed by the organization | To obtain this advantage, it is necessary to study the parameters of the markets at the input of the system (organization), and to maintain it, it is necessary to monitor the market infrastructure |
| market leading position | To retain this main advantage, it is necessary to constantly take measures to retain all the competitive advantages of the organization. |
| exclusivity of the organization's product | This advantage is achieved by the high patentability of products, which, in turn, ensures their competitiveness in comparison with substitute products. |
| distribution channel exclusivity | This advantage is achieved by a high level of logistics, maintained by competitive marketers and sales workers. |
| exclusivity of advertising of the organization's products | To maintain the advantage, highly qualified advertising workers and sufficient funds for it are required. |
| effective system of sales promotion and after-sales service | The advantage is achieved by highly qualified economists, psychologists and managers of the organization. of course, the necessary means |
| Forecasting pricing policy and market infrastructure | In order to maintain this competitive advantage, it is necessary to analyze the effect of the law of demand, supply, competition, etc. on your products, to have a high-quality information base and qualified specialists. |
The effectiveness of the functioning of the organization: Profitability indicators (according to profitability ratios of products, production, capital, sales) |
Economic indicators determine the quality of the functioning of the organization in all aspects and areas. Therefore, in order to maintain its competitive advantages, an organization must increase scientific level management. |
| The intensity of the use of capital (according to the turnover ratios of types of resources or capital) | Levels of profitability, intensity of capital use and financial stability of the functioning of the organization are determined individually |
| financial sustainability of the organization | The higher the strength of competition in the industry, the lower will be the profitability and cost of goods, but the higher the quality of goods. |
| Share of exports of science-intensive goods | Competition is also a factor in increasing the efficiency of the use of all resources. |
Listed in Table. 1.1 and 1.2 external and internal factors of competitive advantage of the organization are the maximum possible for the abstract organization. For a particular enterprise, the number of competitive advantages can be any.
“The value of each benefit can be quantified and analyzed over time. However, it is hardly possible to integrate all the benefits into a single indicator. ”
In principle, the more an organization has competitive advantages over current and potential competitors, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to improve the scientific level of management, gain new competitive advantages and look more boldly into the future.
1.6 Key competitive success factors
Key success factors are commonly referred to as those factors arising from market requirements that can give the company an advantage over its competitors.
For example, a key factor may be “niche”, i.e., unsatisfied needs of existing manufacturers that can be satisfied by the proposed product (or, more often, for which an entirely new product should be developed).
Thus, each firm finds a segment of the market that is not currently occupied and establishes itself in it, which ensures commercial success. Naturally, each time the "ecological niche" was significantly different.
Key success factors can also be changes in the distribution network, in the policy of choosing a commodity-producing system, etc.
“Key factors are always revealed by comparing your product and your company with competitors. After the comparison, the top administration decides on what indicators it should outperform its competitors, and on what indicators it should keep on par with it or even yield in some way. ”
It should be remembered that sometimes the key success factors are of such a nature that the company is not able to own them on its own. This casts serious doubt on the advisability of going to this point and should be the subject of close attention by the management of the company.
“When managing key factors, first of all, it is necessary to find out which - “ external environment” or “internal environment” of marketing is responsible for the obstacles in the use of key success factors. Next, decide whether the company is able to change the existing state of affairs; if yes, develop a program of change, and if not, find out the possibility of working in another market or sector. ”
The role of elements of the internal structure of the company, which are called "responsibility centers", is very significant in this matter. Very often, this is where the key success factors are hidden. Responsibility centers are those units that are assigned special tasks in achieving the planned financial performance.
Cost centers are production units that set standards for the consumption of materials and labor resources. The goal of the leaders of these centers is to minimize the deviations of actual costs from planned ones.
Sales centers are sales units that are prohibited from lowering prices in order to increase sales, but are ordered to strive for a maximum sales volume.
Discretionary centers are administrative divisions in which it is not possible to strictly establish “costs / results” norms: here it is required to ensure the highest possible quality of activities with the flexibility of the expenditure item of the marketing budget.
Profit centers - usually all divisions, one way or another tied to the lines of the "product orientation" structure, and the amount of profit is set based on those elements of marketing that the corresponding division is really capable of managing.
investment centers. In them, the performance indicator is "return on capital" (profit minus tax on capital employed). All these centers (firm divisions) are given such rights so that they can maximize the use of their resources. Thus, the key factors of competitiveness provide the company with competitive advantages, which explains the need for their use in the activities of the enterprise.
2. Management of competitive advantages in the organization
2.1 Characteristics of the activities of Arnest OJSC
The Arnest company is the Russian leader in the aerosol business in the field of high technology, volumes of production and sales of products. The company spends a lot of time and money on the implementation of social programs. For more than 30 years, Arnest has been producing cosmetic products and household chemicals.
Form of ownership: private property. Organizational and legal form: open joint stock company.
“Joint stock company” means a company authorized capital which is divided into a certain number of shares. Shareholders, i.e. the owners of the shares of this company are not liable for its obligations, but bear the risk of losses associated with the activities of the company, within the value of their shares, i.e. have limited liability. ”
“Joint-stock companies are divided into open and closed. In the first case, the participants in the company can alienate their shares without the consent of other shareholders, in the second case, the shares are distributed only among the participants. The number of shareholders of an open joint stock company is unlimited. ”
Among the well-known brands: “Charm”, “Symphony”, “Lyra”, “Deadly Force”, “Garden”, “Mebelux”, etc. Through the active development of these brands, the company has traditionally maintained a leading position in the market for hair styling products, air fresheners, universal insecticides and polishes.
The assortment of the company is constantly being improved and today it has more than 350 product names. The high quality of products has been repeatedly confirmed by the most prestigious awards.
The enterprise is equipped with the most up-to-date high-quality equipment of leading European companies. The production capacity is 150 million aerosol packages and 15 million polymer bottles per year.
"Arnest" was the first in Russia to enter the international level of production and product quality control, has a quality system certificate ISO 9001 and an environmental certificate of compliance with ISO 14001-98.
To date, the company's products are represented in all cities of Russia, the CIS countries, the Baltic States and Iran. Among the key partners of the enterprise are world-famous perfume and cosmetic companies in Europe: Schwarzkopf, L`oreal, Unilever, as well as the Russian concern Kalina.
The Arnest company is focused on the production of high quality products and strives to meet the needs of the consumer as much as possible. The use of the most modern innovative technologies allows Arnest to maintain the status of a leader in Russia.
The most important tasks of the company are:
Maintaining and improving leadership positions in the main segments of the aerosol market,
Unification of all employees of the Company on the basis of common business objectives, corporate values, principles, norms and rules,
Constant expansion of the presence in cosmetics, household chemicals and insecticides through geographic expansion and entry into new, potentially attractive markets and segments.
The Arnest company provides a full range of services for the manufacture of the product:
Acquisition or production at the enterprise of primary components (aerosol can or polymer bottle) and group packaging;
Acquisition of all types of raw materials from the best manufacturers from anywhere in the world, or work with tolling raw materials;
Additional cleaning at the enterprise itself and bringing hydrocarbon propellants to the required pressure;
Mixing the ingredients of the active substance and filling it into aerosol cans and polymer bottles on the lines of European manufacturers;
Prepress preparation and adaptation of designs to the requirements of Russian legislation;
Development of recipes according to the submitted consumer requests;
Certification of the finished product with the execution of the entire set of necessary documents;
Storage of the finished product in our own warehouses;
Development of optimal logistics schemes for the delivery of the finished product to the customer's warehouses.
The organization under study operates within the framework of an organizational development strategy and, in particular, a moderate growth strategy, the use of which implies agility; use of external resources; business diversification; expansion of basic research; concentration of efforts on the implementation of innovations.
Prospects for the further development of JSC "Arnest" are due to the growth in consumption of products by Russian and foreign buyers.
Despite the growth in the volume of manufactured products, the company has not yet reached the required level of implementation, which allows the team to consistently and purposefully solve the tasks of managing competitive advantages that it faces.
2.2 Organizational structure of OJSC"Arnest"
The functions of managing the activities of an enterprise are implemented by departments of the management apparatus and individual employees, who at the same time enter into economic, organizational, social, psychological relations with each other.
The organizational structure of the personnel management system is a set of interrelated divisions of the personnel management system and officials.
noted high degree centralization of control. Management principles that form the basis of the organizational structure:
Hierarchy of management levels, in which each lower level is controlled by a higher one and is subordinate to it;
Correspondence of the powers and responsibilities of management employees to their place in the hierarchy;
Division of the labor process into separate functions and specialization of workers according to the functions performed;
Formalization and standardization of activities, ensuring the uniformity of the performance of their duties by employees and the coordination of solving various problems.
The Management Board is headed by the President and consists of several members appointed by the Board of Directors. It guides certain areas work, its members take part in resolving issues at meetings of the board. The Management Board submits to the General Meeting of Shareholders an annual report, a balance sheet and a profit distribution plan. Board functions: current planning; management of research work, production, sales; development of a specific course of action, programs and methods; decision-making on organizational forms management; delegation of authority to officials at lower levels of management; conducting personnel policy; control over the state of the financial position of the company; approval of company budgets; control over the profitability of operations; ensuring intercompany communications and settlements.
The most important criteria for the quality of the board's work are: ensuring stable profits, optimal sales volume, high quality and novelty of products, as well as services provided to the consumer.
The middle level of management is designed to ensure the efficiency of the functioning and development of the company by coordinating the activities of all departments.
Central services are functional services that carry out the most important management functions: marketing, planning, coordination, accounting and control, management of the provision of scientific, technical and production and marketing activities. The activity of the central services is based on the coordination of the work of the relevant departments in the production departments. The main activity of the central services is the implementation of functional links:
The lower level of management is focused on the operational solution of tasks for the organization of economic activity within the framework of structural divisions, the main task of which is to fulfill the established tasks for the production of products and making a profit.
Production departments include smaller divisions - departments, sectors. The departments are headed by managers who have complete independence in solving current problems.
2.3 Marketing strategy and goals of Arnest OJSC
Under the conditions of developing market relations, Arnest CJSC pays special attention to the operational and almost daily analysis of various aspects of the company's marketing activities.
The highest, the main goal of the enterprise in a market economy is to maximize profits. However, at certain stages of development and functioning of the organization, there are intermediate goals, for example: to ensure break-even work; win a large share in the market of goods and services; regulate the product offer in accordance with demand; expand the sales market; to ensure the maximum growth of indicators;
Each of these intermediate goals always acts as a means to achieve the main (main) goal. The main strategic goal of JSC "Arnest" is to maintain long-term competitiveness in the Russian market of the aerosol business. To achieve this goal, Arnest OJSC implements the following strategies:
1. Focus on Russian market and the CIS market, growth through development on the expansion of the domestic market.
2. Increasing the volume and share of sales of products for export.
3. Client-oriented development strategy - the implementation of corporate orders for the manufacture of products, the creation of discount systems, the development and implementation of discounts for regular customers of company stores.
Marketing strategy of OAO “Arnest”:
Increasing the number of sales while reducing production costs;
Concentration on a promising market segment;
Product differentiation;
Development of discount systems and customer cards for buyers;
Creation of a club of like-minded clients;
Creation of a client-oriented strategy.
2.4 Analysis of the market and competitive environment of OJSC “Arnest”
Continuous monitoring of the competitive environment is a necessary condition for an analytical assessment of the market situation and orientation of production to meet the needs of the market in the most efficient way.
To ensure quality management at the enterprise, promising strategies in the field of competitiveness should be developed, as well as the necessary organizational measures for all aspects of economic management.
The main competitors of the enterprise are: "Zavodbytovoykhimii" LLC, "Dzerzhinsky Plant of Household Chemistry" CJSC, "Spektr" CJSC, "Vershina" LLC, "Household Chemicals Factory" CJSC. The figure shows the occupied share of Arnest OJSC in the market of aerosol products manufacturers, as well as the share occupied by its main competitors.
Rice. Distribution of market shares
Increasing competition while simultaneously expanding the market for aerosol products creates additional requirements for updating the range and improving product quality. The advantages of competitors can lead to the loss of customers, both existing and potential; and also lead to loss of market share.
To prevent this from happening, the company must find and eliminate the reasons for lagging behind competitors, as well as try to "get around" the competitor with other advantages.
“Consumer organizations tend to have clear guidelines for buying goods in such markets. These are the popularity of goods, the reliability of the seller, the stability of quality, the certainty of delivery, the availability of prices. However, under certain conditions, certain specific factors may acquire greater significance. ”
In essence, any superiority over competitors is achieved through innovation, and therefore the ability to introduce new technical and technological elements in the activities of an enterprise that provide market advantages is a necessary component of the competitiveness of an enterprise. In a highly competitive environment, superiority in quality, price and sales areas is today a life-supporting factor for success in the market.
2.5 Quality policy of JSC "Arnest" as a competitive advantage
The priority goal of JSC "Arnest" is to meet the requirements and expectations of consumers and other interested parties, to maintain the company's image on this basis and increase the competitiveness of products.
To achieve this goal JSC "Arnest" carries out:
Constant updating of the assortment, increase in the output of new types of products;
Introduction of new technologies based on modern equipment;
Compliance with the requirements of environmental legislation and other mandatory requirements in the field of ecology;
Reducing the negative impact of its activities on the environment;
Formation of ecological culture of personnel;
Training of all employees on quality and environmental issues;
Involvement of personnel in quality improvement activities;
Formation of mutually beneficial partnerships with all stakeholders;
Improvement of the integrated quality management system of JSC "Arnest", in relation to perfumery and cosmetic products and household chemicals, in accordance with the requirements of GOST R ISO 9001-2001 and GOST R 14001-98.
The management of OJSC "Arnest" undertakes to follow this Policy and provide the necessary resources and conditions for its implementation by all employees.
The Russian company "ARNEST" declared itself as a high-level enterprise, having received in 2000 a certificate of compliance with the requirements of the international quality standard ISO 9001-96.
In April 2003, the quality management system was re-certified according to the new version of the ISO 9000 series standards.
In December 2004, the environmental management system of JSC "Arnest" was certified for compliance with the requirements of ISO 14000 series.
Obtaining these certificates means that the company cares not only about the quality of its products, but also about environmental situation in the region.
The reliability of products is ensured by the types of control existing at the enterprise, ranging from the input control of raw materials and materials to the control of finished products.
Compliance of products, semi-finished products, parts, raw materials with international standards is controlled through an extensive network of documentation. Mandatory requirements for products are provided:
The reliability of the packaging and the composition of the product guarantees the safety of life and health of customers.
The manufacture of products on an ozone-friendly propellant contributes to environmental protection.
2.6 Competitive advantages of Arnest Company
The main competitive advantages of Arnest are:
Presence of own strong brands in the main market niches;
Availability of ISO 9001-2001 (quality management system), ISO 14001-2000 (ecology);
Own production of aluminum cylinders. In Russia, apart from OAO "Arnest", such production exists only at one plant. It should be emphasized that almost half of all aerosol products can only be filled into aluminum cans. This applies to styling mousses (foams), deodorants and antiperspirants, a number of antistatic agents, some cleaning products, and all other products with an aggressive formulation. In addition to the uniqueness of aluminum cylinders, their production has a much higher mobility compared to the production of tin cylinders, which is based on the initial printing on tin with subsequent folding and soldering of rolled sheets;
Own production of European standard valves and spray devices, including heads of several configurations, caps and spray caps of several types. JSC "Arnest" has implemented a full cycle of production of valves and nozzles, which allows not only to fully meet the needs of filling, but also to sell them to customers separately. The quality of produced valves and caps satisfies the requirements of transnational customers;
Production of a tin can. On the territory of JSC "Arnest" there is a German enterprise for the production of tin cylinders with a capacity of up to 100 million pieces. in year. The quality of the products makes this manufacturer the only company in Russia whose products meet the demand of transnational customers for tin packaging for contract filling of aerosols;
Modern warehouse of UVP (hydrocarbon propellants) and equipment for purification of UVP. There is a production of 8 different pressures and mixtures for the entire range of products.
OAO "Arnest" has its own plant for the production of propellants, while none of Russian manufacturers aerosols and up to 90% of world manufacturers do not have these capabilities, but purchase ready-made mixtures. In addition, a serious competitive advantage is the UVP purification system, which allows you to purchase unpurified cheap isobutane fraction and have one of the main components of aerosols at least 40% cheaper than competitors;
Own warehouses for raw materials and finished products: the presence of a logistics warehouse for "L" Oreal, the presence of its own temporary storage warehouse (temporary storage warehouse) for customs clearance of imported goods.A warehouse terminal (11 thousand sq. m.) is at the stage of completion;
Own STC (scientific and technical center) - development of recipes, certification, state. registration. Own accredited chemical analysis laboratory;
Implemented MS Axapta ERP system;
A wide and developing distribution network, currently numbering more than 100 companies in Russia and abroad;
Strong management team focused on the final result.
Based on the above analysis of the competitive advantages of the Arnest company, it can be concluded that the company is successfully working in the production and sale of aerosol products, including due to the fact that it can withstand competition compared to similar objects in this market.
Conclusion
Summing up, it should be noted that in order to survive or win in tough competition, any organization must have certain advantages over its competitors.
Knowing the company's capabilities and sources of competitive influence will allow you to identify areas where the company can go into open confrontation with competitors, and where it can avoid it.
The more an organization has competitive advantages over current and potential competitors, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to improve the scientific level of management, to gain new competitive advantages.
The Arnest company is the Russian leader in the aerosol business in the field of high technologies, production volumes and product sales.
The company's strategy is to find the best ways to offer consumers the highest quality products. The organization constantly increases the range of products offered and strives to develop the marketing component of the business.
Also, the priority goal of Arnest OJSC is to meet the requirements and expectations of consumers and other interested parties, to maintain the company's image on this basis and increase the competitiveness of products.
The study of the competitive advantages of the Arnest company shows the successful work of the enterprise for the production and sale of aerosol products, including due to the fact that the enterprise has certain advantages over its competitors in this market.
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In the article we will talk about the likely areas of competitive advantages using the examples of world-class companies, consider the features of creating business advantages in different industries: in the banking sector, in the tourism and hotel markets, we will separately tell about the specifics of creating competitive advantages for wholesale and retail stores, taking into account modern global trends.
- Universal for everyone
- Advantages in the field of trade
Universal for everyone
Let's start our list of examples of competitive advantage with 12 best practices for creating competitive advantage, which are prepared by analyzing leading industries, global brands and large markets. The point of all the examples outlined below is that there is no single correct formula for creating competitive advantage. Any market can be beaten. It is important to find that feature of the business that will be able to provide the highest level of profit for the company.
Research and innovation
The IT branch is the most technologically equipped business area. Each player in this market strives to become a leader in innovative solutions and developments. In this industry, those who set the pace for the development of innovations and technologies are leading and making super profits. Apple companies and Sony are a prime example of 2 companies that have achieved leadership in the IT market through the use of innovation as a sustainable competitive advantage.
brand awareness
Global recognition, fame and reverence for the brand has allowed companies such as Coca-Cola and Virgin to maintain their market share and dominate the market for many years. High brand awareness and a positive brand identity have also reduced the cost for Virgin to capture new parts of the market.
Corporate reputation
The highest level of corporate reputation can also serve as a source of competitive advantage in the market. Price Waterhouse (consulting and auditing) and Berkshire Hathaway (investment, insurance) have used this competitive advantage to establish their companies as world class.
Patents
Patented technologies are assets that can provide a company with a long-term competitive advantage. In world practice, methods of buying companies due to the ownership of patents and other protected technologies are widely used. General Electric is known for becoming one of the most powerful companies in the world through its ownership of patented designs.
Economies of scale
Dangote Group has become one of the leading manufacturing conglomerates in Africa thanks to own opportunity create products on a larger scale and maintain a uniform price level throughout the trading area.
Rapid access to reverse capital
In world practice, OJSCs win over private companies due to their ability to attract the highest level of investment in a very short period of time. For example, Oracle has raised investments to buy more than 50 companies in just 5 years.
barriers to entry
Restrictions from the country for rivals, protectionist policies of the country can serve as a competitive advantage for local companies. For example, Telmex (telecommunications company, Mexico) or Chevron (energy, USA).
The highest quality product and level of service
The highest level of service is always a strong competitive advantage of the product. IKEA has gained a strong position in the market by being able to provide the highest product features at a low cost and the highest level of after-sales service.
Exclusive
Coscharis Group has taken the lead in the Nigerian market by holding exclusive rights to distribute BMW vehicles throughout West Africa.
Elasticity
The ability to quickly adapt to market changes has provided Microsoft with a leading position in the global software market.
Speed and time
Focusing all efforts on achieving the highest speed and reducing the turnaround time of the service has provided companies such as FedEx and Domino Pizza with a growing and stable position in the industry.
Low prices
Strategy low prices and the ability to retain, strengthen and develop it provided the Wall-Mart retail network with world leadership and the highest level of capitalization of the company.
Database processing improvements
GTBank, AT&T, Google, Facebook have achieved world leadership due to perfect technologies and advances in the field of processing and managing large amounts of information.
Advantages in the banking services market
In this section, we will offer top tips for developing competitive advantages for companies in the banking sector. The weakening of the economies of European states in the modern world, the increase in the level of volatility in the world economy leads to the need to revise the basis of the competitive advantages of the monetary sector. In 2013-2015, it will be more profitable and vital for the banking sector to focus on developing the following competitive advantages:
- increase in return on capital
- Achieving leading positions in profitability on one or more fronts banking(in other words, moving towards specialization and providing the best interest rates for narrow market niches)
- improvement of banking services, speed and convenience of transactions by updating and simplifying business processes
- achieving leadership in safety, reliability and asset protection
- development of a mobile Internet bank and an increase in the technological level of service provision
- simplification of making purchases and lowering commissions with the help of bank cards (including the creation of guarantees for the cancellation of payment in the event of negligent fulfillment of sales contracts - following the example of the PayPall payment system)
Advantages in the hotel services market
In order to select the right competitive advantage, be sure to compare the criteria for the provision of services by your hotel company and rivals. More successful examples of competitive advantages for the hospitality industry:
- service level leadership
- low cost advantage (subject to the ability to generate higher profits than competitors)
- provision of free meals or other additional services
- the most profitable loyalty programs that encourage repeat purchases and more frequent introduction of hotel services
- comfortable location of the hotel for certain groups of clients
- availability of all necessary additional services (conference room, wi-fi, web, swimming pool, beauty salon, restaurant, etc.)
- a unique style of decoration and hotel service, allowing the consumer to immerse themselves in a completely new environment
Advantages in the tourism market
In order to select the right competitive advantage, be sure to compare the criteria for the provision of services by your company and rivals. More successful examples of competitive advantages for the tourism business:
- service level leadership
- focusing on the quality of service for certain customer groups
- the ability to set low prices (subject to the existence of the ability to obtain higher profits in comparison with competitors)
- ease of use of the service and minimization of client time
- the most profitable loyalty programs that encourage repeat purchases
- leadership in one of the types of tourism (see the example of tourism market segmentation)
- availability of all necessary related services
- most noteworthy travel programs
- availability of a mobile application and the highest manufacturability of the service
- most profitable flaming tours
Advantages in trading
More successful examples of competitive advantages for the trade industry (for example, retail store): breadth of assortment, exclusivity of sales in a certain area, the ability to set low prices, leadership in service during the warranty period and in after-sales service, the presence of free prizes for the buyer, leadership in the attractiveness of promotional offers, leadership in the quality, freshness, modernity of products sold; staff competence; ease of choice, convenience of choice and saving time for the buyer; business computerization and the availability of web trading; the most profitable loyalty programs; professional advice on choosing products for the buyer; convenience of the location of the retail outlet.
Increasingly, in texts on websites, I see subheadings in the style of a la “Why us?”, Under which lists like this are inserted:
We are a dynamically developing company
We use only advanced technologies
We employ professionals
And so on... At first glance, it seems, text and text, what's wrong with that: everyone writes like that. But let's take a closer look at this text. This list is supposed to highlight competitive advantages. Competitive advantage is what distinguishes a company from others.
Now tell me which adequate competitor will write:
Our company stands still and does not develop
The quality of our services is complete trash
We have the most shabby technologies and archaic approaches
We employ only laymen and amateurs
We treat all clients with the same brush
Exactly! Nobody writes like that. So it turns out that the advantages described in the first list are not advantages at all, since competitors also write about this.
But that's not all
And now the most interesting thing... In general, it is believed that the advantages of the company should help the consumer in choosing. Therefore, they must tell the consumer what he gets by choosing a particular brand. However, when companies everywhere shout: “We are this ..., we are this ... and we also have ... what good fellows we are!”, the consumer has a logical question: “Wait a minute, guys, but where am I here?”
Lack of customer focus is the most common mistake most benefit writers make. At the same time, special unique ones manage, instead of specificity and accessibility, to give out the top of “creativity”, which introduces even more confusion. For example:
For our customers, we make foie gras from liverka
We clone ourselves to solve any problem
We ignore the laws of the space-time continuum
Etc. However, you can talk about the shortcomings as much as you like. Let's take a closer look at how to properly describe benefits.
How to correctly describe the benefits of the company
For example:
"We use only cutting-edge technologies"
Changes to
"You save your time because we use only advanced technologies"
2. In addition, the more specific the benefits are, the stronger they will be.
For example:
We provide services of the highest quality
Changes to
“You are protected as a consumer. The quality of our services complies with international quality standards ISO 0889.25 and ISO 0978.18. In addition, the guarantee for each of our services is 2 years.
3. Explicit indication of differences
Another effective tactic is pointing out differences head-on. However, in this case, you also need to be as specific as possible. For example:
“What sets us apart from our competitors is:
Our bank and its partners have more than 5,000 ATMs in the city of N, which means that you will not experience any problems with cash withdrawals.
Our bank has established partnerships with banks from neighboring countries, which means that you will be able to freely enter adjacent markets.”
☑ HINT: The above example can be strengthened by putting the second part (beneficial) at the beginning, and the property of the bank at the end of the sentence, connected with the conjunction “because”.
☑ SUMMARY:
So, if you want to describe the benefits of a company by making it a working marketing tool and not just an enthusiastic ode, try to make it specific and customer-focused. Avoid empty clichés and describe benefits with figures, facts and case studies.
The world does not stand still, information is constantly updated, and market participants are in search of marketing ideas, ways of doing business, new views on their 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 that make 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 target audience 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;
- tight control of overhead and production costs, abandoning small operations;
– availability of technology for the cheapest production in the industry;
– standardized production of the company;
2 steps to building a competitive advantage
Alexander Maryenko, Project Manager of 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 involves protection from 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 leaders 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 for improving 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, corporate identity;
– appearance: packaging, design;
– required quality 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 of 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 all marketing communications to attract the attention of the target audience to the product, with the formation of knowledge about the product and key properties, 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 of 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 measures to create new components of market relations in order to obtain 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, and additional services to 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 low order advantage is represented by the possibility of using cheap raw materials, work force, 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 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, Enlightenment, Eksmo publishing houses, Ministry of Information Technologies and Communications of the Russian Federation, Ministry of Regional Development of the Russian Federation, Murmansk Port, Rosprirodnadzor, administrations of the Arkhangelsk, Nizhny Novgorod, Tomsk regions and the Krasnoyarsk Territory, Avantix company.
