Creating a distinctive competitive advantage that will place a company on the global map and elevate it to the status of a robust business is one of the core requirements for economic success. Therefore, strategies for building a competitive advantage must be properly understood and actively used in the target market setting. Encompassing the core factors contributing to corporate success, the existing five strategies for running a successful business must be integrated into every organizational context.
The first strategy to consider when designing a unique framework for running business concerns selecting a sustainable financial model. Specifically, the use of a low-cost provider approach represents one of the most common designs for a business so that it could be quickly propelled to the top of the target economic setting. As a rule, most competitors with an established presence in the market find it challenging to adjust their cost management approaches accordingly to match the low-cost one.
Another method of winning over multiple competitors in the target market concerns the use of a broad differentiation strategy. Implies that an organization should seek to embrace as a great range of potential customers as possible, a differentiation strategy typically implies increasing product or service variety. Thus, the offered product or service can appeal to different audiences, allowing a company to expand its market influence and branch out into the development of other services and goods (Feng et al., 2019). Therefore, apart from placing it at the top of the competition pyramid, the specified approach creates a platform for continuous innovation.
A framework suggesting the direct opposite of the strategy described above, the focused low-cost strategy implies minimizing the expenses spent on manufacturing and other production-related processes by targeting a narrower customer segment (Feng et al., 2019). Suggesting that a company develops a niche service or product that caters to the unique needs of a specific audience, the described solution serves as a viable and effective strategy for companies with a limited range of resources and helps an organization take a unique place in the market, thus, ensuring that its customer base remains loyal and consistent.
Similarly, the focused differentiation strategy suggests that the designed product offers niche customers a product or service with a specific attribute that no other company guarantees. Therefore, the range of customers that an organization views as its core target audience will remain loyal to the firm as a manufacturer and producer of a niche item. The specified approach allows for increasing the quality of the product exponentially, leaving rivals behind and reaching the top of the selected market sector.
Finally, one must give credit to the best-cost provider approach. The proposed strategy implies meeting customers’ highest quality expectations while also offering the product at a lower price than that of one of the key competitors. The dual focus that the specified framework suggests. Namely, the intention to maximize quality while minimizing costs attracts a wide range of customers.
Due to their comprehensive approach to creating a strong competitive advantage and premises for managing essential organizational processes, the five strategies for running a business must be integrated into every corporate setting. They contribute to the rational management of resources and their proper allocation, as well as impeccable data management and promotion techniques. Therefore, the five approaches under analysis should be seen as vital to the management of an organization and the development of a viable business strategy.
Reference
Feng, T., Wang, D., Lawton, A., & Luo, B. N. (2019). Customer orientation and firm performance: The joint moderating effects of ethical leadership and competitive intensity. Journal of Business Research, 100, 111-121.