Sustainable Competitive Advantage Assignment Help
Discuss what is a sustainable competitive advantage is, and why it is so important to a winning business strategy? Illustrate your answer with the practical example of an organization from the Business sector in UAE that has established a sustainable competitive advantage over its rivals.
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Sustainable competitive advantage includes those wise utilization of assets, traits, and skills of the company which enables it to have increased focus, improved profit margins, increased the sales rate and enhanced customer and employee retention as compared to the competitors (Maury, 2018). The objective of competitive advantage is not only to raise the number of consumers, but also to build reputation of reliability and trust in the market. As a matter of fact, this is linked to enhance the brand image, compared to other rivalry companies. The company requires a sustainable competitive advantage to achieve long-term business value. It is basically divided into three key subdivisions, (i) cost advantage, (ii) value advantage, and (iii) focus advantage (Bhakar, Kaurav, and Parashar 2016). In "cost advantage strategy", companies compete on the basis of price, while in "value advantage" it differentiates itself by providing a superior offering. On the contrary, in "focused advantage", the company emphasizes on a particular niche market by providing them customized offering. Incorporating sustainable competitive advantage in the company's marketing and sales department makes it easier for the customers to understand the reason for spending their money on that particular company. Moreover, it also guides the company towards making effective decisions and give direction to get sharp focus. It also facilitates the company to gain excess return for the stakeholders (Huang, Dyerson, and Wu 2015). Thus, it is the prime objective of any company to acquire sustainable competitive advantage in its business and excel its competitors.
For instance, the Emirate Airline is one of the major airline companies in UAE and it works with the longest flight in the globe. It was established in the year 1985 and is owned by the Dubai Government. It has been operating in the Asian market for approximately 23 years, where it is able to experience maximum growth. It holds up to 39% of the market share in the airline industry (Gudmundsson, 2019). It has managed to become successful by incorporating sustainable competitive advantage, which is the "competitive pricing strategy" to employ against its rival firms. The airline has sustained a top class flight operation along with cheaper long-haul flights in a profitable manner (Gudmundsson, 2019). In order to gain a competitive advantage, the airline company has implemented minimal labour cost, and a young fleet. Additionally, it has also used a wide body to maximise cargo support and actively uses opportunistic strategies.
What is a Blue Ocean strategy? Discuss whether it supports the establishment of a sustainable competitive advantage. Discuss an example of a Business in the Gulf Region that has established a Blue Ocean strategy.
Blue ocean strategy can be described as the search for a marketplace where there exists no or very little competition. In this strategy, the entrepreneur hunt for a business which includes very few operating firms with no pricing pressure, and thereby reducing competition (Kim, and Mauborgne, 2017). In the present globalized market, competition among business rivals have become intense and they are trying every possible way to achieve more market share. It is believed that a product under pricing pressure increases the threat to the company's operation. Thus, most of the entrepreneurs look for paths to find new business opportunities where they can enjoy competition-free market share. This strategy of looking for uncontested market share is known as the "blue ocean", which increases the potential for a higher profit. Here, the company owner aims to capture the new demand and introduces a product having superior feature, and thus makes the few existing competitions as irrelevant. Because of minimum competitors and unique product features, the company is also able to create a huge profit by increasing the product price (Orlov, and Chubarkina, 2017).
The Blue Ocean strategy enables a company to choose the type of business to be engaged in and design their long-term goal. In this way, the company is motivated towards gaining sustainable competitive advantage by becoming aware of its strengths and weaknesses and being responsive towards the opportunities and threats existing within the industry.
For example, Saudi Telecom Company has incorporated the Blue ocean strategy to achieve a sustainable competitive advantage. It has been identified that effective use of the strategy helps the company to create strong value in the telecommunication industry within the Gulf Region. In order to gain a competitive advantage, it has included innovation in its marketing service. There exists minimum competition in the telecommunication industry in the local area which increases the scope of opportunities for Saudi Telecom Company. It is able to gain sustainable competitive advantage by realigning its management and operation system, which in turn improves the customer experience (Krishnaswamy, 2017). Following the Blue ocean strategy, the company has created its own market space by delivering unique product and services which is difficult to imitate by competitors. It has mainly focused on young and savvy customers as its target market. To connect with this target audience, it has developed two web series "Saudi Hero" and "Rayih Rayih" where it is able to communicate the brand's functional benefits.
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