The Study Of Overall Competitive Advantage Commerce Essay

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Competitive advantage is the situation that being desired by every firm despite big or small the firm. The idea of competitive advantage have been recognise for centuries. However, it is during the year of 60's the concept was properly introduced by Edmund Learned & Kenneth Andrews which stated that SWOT analysis are the major contribution towards achieving competitive advantage (Mohammad Safari et al, 2011). Meanwhile, according to Duncan et al (1998), the ability to gain and sustain competitive advantage depends on the company location and their target market. Although different scholar refers to other different expertise, most of them will definitely refer to Porter's definition regarding competitive advantage which is an organization can achieve the competitive advantage if they able to take the risk in the uncertain industry, cater the needs of customers and respond to the new market entries (Byeong Yong Kim and Haemoon Oh, 2004; Liqin Ren et al, 2010).

LITERATURE REVIEW

Competitive advantage

In strategic management, one of the major objectives that an organization seeks is competitive advantage. Competitive advantage in simple words is where the firm having the speciality in terms of products or services that they produced compares with others competitors (David, 2013). Thus, if the firm have the ability to against the competitors and caters the needs of the customers, they are said having the competitive advantage.

Sustain Competitive Advantage (SCA)

According to David (2013), a firm cannot just focusing on gaining and achieving competitive advantage but also sustaining it by gradually adapt to changes that happen externally and internally as well as choose well planned strategies that brings benefits to the firm. Different from it, another scholar propose that if the organizational resources are inimitable, valuable, rare and have no substitute it can lead to sustain the competitive advantage (Patricia Ordonez de Pablos & Miltiadis D. Lytras, 2008).

Dimension of Competitive Advantage

A study that being made by Krajweski & Ritzman found that if a firm focusing on the right dimension of the competitive advantage such as cost, quality, time, flexibility, innovation, and responsiveness, the firm will be able achieve competitive advantage (Mohammad Safari et al, 2011).

Cost

Cost or benefits and risks related with the marketing decision about the products or services (David, 2013). The firms must make comparison among the competitors in terms of the cost of producing the products, fixed cost, employment rate cost and the productivity (Mohammad Safari et al, 2011). However differ from the two scholars, for Duncan et al (1998), they proposed that even the firms having cost advantages but still the resources and capabilities of it should not be taken as the absolute determinants of competitive advantage.

Quality

Nowadays firms are more into the quality improvement in terms of the products, process and services in order to achieve world-class performance level (Beal & Lockamy III, 1999). Some of the way that can be use is by adding some unique characteristics to the products to gain competitive advantage and thus benefits the consumers (Mohammad Safari et al, 2011).

Time

Definition of time might be differing from one firm to another. From the research done by Mohammad Safari et al (2011), they found out that reducing delivering time between the times the customers made the orders until the time products or services arrived can help the firm gaining competitive advantage.

Flexibility

For Patricia Ordonez de Pablos & Miltiadis D. Lytras (2008), they define flexibility in terms of the firm flexibility is the results from the employee flexible behaviour. They introduced the theory of it after doing some research on some strategic Human Resource Management (HRM) components which are the practices, employee skills and employee behaviour. Meanwhile, flexibility from the view of Mohammad Safari et al (2011) is the processes of changing the products to the new one or from one customer to another at the least cost or impact.

Innovation

Innovation can be in terms of making new or improvise the existing products or service or even refer to the marketing innovation. Innovation basically comes from the idea of the employees or the workers. Employee's empowerments play an important role in the innovation (Mohamad Safari et al, 2011). On the other hand, marketing innovation is the continuous process that re-combines the marketing strategies and produced new marketing system that can compete at stronger market competitive capabilities for the new products and the promotions of new markets (Liqin Ren et al, 2009).

Responsiveness

Responsiveness can also be called customer satisfaction. The one key indicator that helps to determine whether organizations have achieving the competitive advantage is by determine the customer satisfaction of the products or services. The customer satisfaction can be measured by looking at the repeat sales, positive word mouth-of-mouth and customer loyalty (Mohammad Safari et al, 2011).

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