Competitive advantage is the characteristics of a product or brand that give a company an edge over its direct competitors. Structural and functional changes should make it possible to bring the main competencies of the enterprise in line with the emerging requirements of the external environment. Competitive advantage management requires adaptation and implementation of new technologies, and sometimes it can be challenging to understand which technologies are effective and which are not. Many business leaders can predict the consequences of introducing technology; however, the hardest part is maintaining the advantage.
Using Effective Technologies in Business Solutions
The high proportion of modern equipment and new information technologies in the organization ensures high profitability indicators. Each firm must look for a source of competitive advantage in its internal factors and resources and external ones (Marichova, 2021). To not be mistaken in the choice of technology, one should pay attention to the following factors. First, the attempt to introduce new technologies must be accompanied by considering the current capabilities and needs of the firm (Lee & Yoo, 2019). If the introduced innovations, despite their positive results in financial activity, will not be suitable for the company’s goals, the implementation of such technologies should be limited.
Secondly, it is required to ensure that there is a plan for solving the difficulties arising during the innovation’s implementation. The transition to an Internet platform for the sale of goods and services involves creating robots that collect orders in the warehouse (Wilburn K. M. & Wilburn H. R, 2018); it is believed that people are slower to cope with such tasks. In particular, for example, in the analyzed situation, it is crucial to think about the problem concerning the dismissal of workers in connection with their replacement with robots in advance. Third, one should take advantage of the publicly available data on the effect of technological innovation on the growth of firms’ profits. Ultimately, the growth of the company’s profits is its primary goal. Therefore, the firm needs to make every effort to increase it. Effective new technologies should be introduced, considering the firm’s specific needs.
Difficulty Maintaining a Competitive Advantage
It is not that difficult to develop new technology and make a profit due to its implementation in the short term. Rather, it can be challenging to maintain the company’s current competitive advantage as market conditions are constantly changing. The creation and further use of all new developments are preceded by assessing risks and negative consequences. Business planning is the basis of its successful activity; accordingly, an attempt to predict how, for example, the brand promotion strategy will affect the company’s activities can increase the efficiency of using various marketing techniques. A well-designed business plan can make decisions more accessible and increase the likelihood that one’s venture is successful (Alonso-Vazquez, 2018). Planning for negative consequences ensures that adverse effects do not become the circumstance due to which the application of a particular innovation will become impossible.
For modern buyers, it is essential to companies which provide an environmental component when creating a product. In particular, some buyers who are aware of the environmental impact of packaging purchase products from sustainable brands (Popovic et al., 2019). To provide a competitive advantage, firms need to pay attention to this kind of business trend. Accordingly, considering the current needs of consumers allows the firm to avoid risks when switching to different methods of doing business. Innovation enables companies to quickly and efficiently adapt to changing market conditions (Chatzoglou & Chatzoudes, 2018). Thus, as in innovation, an attempt to change policy should be accompanied by a preliminary consideration of the market participants’ needs. Entrepreneurs can use the logic for recognizing potentially successful technical innovations in other areas of business as well.
References
Alonso-Vazquez, M. (2018). Management and business plan. UK: Emerald Publishing Limited.
Chatzoglou, P., & Chatzoudes, D. (2018). The role of innovation in building competitive advantages: An empirical investigation. European Journal of Innovation Management, 21(1), 44-69.
Wilburn K. M., & Wilburn H. R. (2018). The impact of technology on business and society. Global Journal of Business Research, 12(1), 23-39.
Lee, K., & Yoo, J. (2019). How does open innovation lead competitive advantage? A dynamic capability view perspective. PLOS One, 14(11), e0223405.
Marichova, A. (2021). Competitive advantages of the construction firm. Sofia: Avangard Prima.
Popovic, I., Bossink, B., & Sijde, P. (2019). Factors influencing consumers’ decision to purchase dood in environmentally friendly packaging: What do we know and where do we go from here? Sustainability, 11, 1-22.