Advantages of trading company Examples. Competitive advantages of the company

The world does not stand still, the information is constantly updated, and market participants are in finding marketing ideas, ways to conduct business, new views on their own product. Any business is subject to testing for strength from competitors, so when developing a development strategy, it is reasonable to take into account their influence occupied by market share, position and behavior.

What is a competitive advantage

A competitive advantage is a certain superiority of a company or product over other market participants, which is used to strengthen its positions when leaving the planned level of profit. A competitive advantage is achieved through the provision of a larger number of services, better products, relative cheap prices and other qualities.

Competitive advantage for business provides:

- prospects for long-term growth;

- stability of work;

- getting a greater norm of profit from the sale of goods;

- Creating barriers to new players when entering the market.

Note that competitive advantages can always be found for any type of business. To do this, make a competent analysis of your product and a competitor product.

What types of competitive advantages are

What makes it possible to create competitive advantages for business? There are 2 options for this. First of all, the competitive advantage can provide the product itself. One of the types of competitive advantages is the price of goods. Buyers often prefer to buy goods only because of its cheapness relative to other proposals with similar properties. Because of the cheapness, the goods can be purchased even in the case when it does not represent a special consumer value for buyers.

The second competitive advantage is differentiating. For example, when the product has distinctive features, thanks to which the goods become more attractive to the consumer. In particular, differentiations can be achieved due to the characteristics that are not related to consumer properties. For example, at the expense of the brand.

If the company creates competitive advantages of his product, it can exclusively allocate its position in the market. It is possible to achieve this due to the monopolization of the part of the market. True, such a situation is contrary to market relations, since the buyer deprives the opportunity to choose. However, in practice, many companies not only provide themselves with such a competitive advantage of goods, but also sufficiently retain it.

4 criteria for assessing competitive advantages

Utility. The proposed competitive advantage should be useful for the company's activities, and should also increase the profitability and development of the strategy.

Uniqueness. Competitive advantage should be the product on the background of competitors, and not repeat them.

Protection. It is important to legally protect its competitive advantage, to maximize the possibility of copying it.

Value for target business audience.

Competitive advantages strategies

1. Leadership in costs. Thanks to this strategy, the company receives incomes above the middle industry due to the low cost of its production, despite the high competition. The company, when receiving a greater norm of profit, can reinvest data tools for supporting goods, informing about it, or win from competitors at the expense of smaller prices. Low costs provide protection against competitors, since income is preserved in conditions that are not available to other market participants. Where can I use the leadership strategy in costs? This strategy is applied when saving on scale or with a perspective of entering less costs in the long run. This strategy is selected by companies that cannot compete in the industry at the product level and work with differentiation approach, providing distinctive characteristics for goods. This strategy will be effective with a high proportion of consumers who are sensitive to prices.

• Competit Information: 3 Rules for His Collection and Use

For this strategy, unification and simplification of the product is often needed to facilitate production processes, extension of production volumes. It may also require a high amount of initial investment in equipment and technology to reduce costs. For the effectiveness of this strategy, careful control of labor processes, design and product development, with a clear organizational structure.

Cost leadership can be achieved at the expense of certain capabilities:

- limited access to the enterprise to obtain cheap resources;

- the company has the ability to reduce production costs due to accumulated experience;

- the management of the company's production facilities is based on the principle contributing to the effect of saving scale;

- the company provides for scrupulous management of the level of its stocks;

- strict control of overhead and production costs, refusing small operations;

- the availability of technology for the cheapest production in the industry;

- Standardized company production;

2 steps to form a competitive advantage

Alexander Marynko, Head of Projects Group of Companies "A DAN DZO", Moscow

Clear instructions for the formation of a competitive advantage, given the individuality of each market, does not exist. However, in such a situation, you can be guided by a specific logical algorithm:

Determine the target audience that will buy your product or affect this decision.

Determine the real need for such people associated with your services or products, which is not yet satisfied with the suppliers.

2. Differentiation. The company, when working with this strategy, provides unique properties for their goods that are important for the target audience. Therefore, they allow you to install a large price for the goods compared to competitors.

For the leadership strategy in the product are necessary:

- the product must have unique properties;

- the ability to create a reputation as high quality product;

- High qualification of employees;

- Ability to protect a competitive advantage.

The advantage is the possibility of selling the product at large prices than on average in the industry, avoiding direct competition. Thanks to this strategy, you can achieve better commitment and loyalty to the brand, under the conditions of competent construction of the range, the availability of competitive advantages.

Risks or disadvantages of using differentiated marketing strategy:

- there is a significant difference in prices, because of what even the unique qualities of the goods will not attract a sufficient number of buyers;

- The goods may lose its uniqueness when copying the advantages of cheaper products.

This strategy is used for rich markets by companies ready for high investment in promotion. It does not have to talk about low cost - it will be higher than the average market. However, this is compensated by the opportunity to sell the product at higher prices.

3. Leadership in niche or focus.The strategy implies protection against major competitors and substitute goods. To achieve a high profit rate, in this case, it is possible to achieve a more efficient satisfaction of the needs of a narrow audience of consumers. This strategy can be built on the competitive advantages of any type - on the latitude of the proposed range or less product price.

In this case, the company is limited by market share, but it does not need significant investments for the development of the product, which is a chance for surviving small enterprises.

Risks and disadvantages of using focusing strategy:

- high probability of large differences in the pricing of goods compared to leading market brands, which can scare their target audience;

- the attention of major market participants switches to niche segments in which the company works;

- Serious danger of reducing the difference between the needs of the industry and the niche market.

Where you can use the leadership strategy in niche? Working with this strategy is recommended for small companies. It is most effective in the saturation of the market, the presence of strong players, with high cost or non-competitiveness on costs in comparison with market leaders.

Three stages of service strategy

Stage I. Innovation. When one of the market participants introduces new in customer service issues. The company is allocated to this period, given the availability of a new competitive advantage.

Stage II. Getting used. The proposed service becomes familiar to consumers, the analogue is gradually introduced and in the activities of competitors.

III stage. Demand. For consumers, this offer becomes an integral element of the service or product, moving to the category of standards.

How to check the level of service in your company

• Carrying out informal surveys. The general director and other managers need to understand the opinion of consumers about the proposed service.
• Conduct formal polls (focus groups). It will be rationally involve for these events and consumers, and representatives of all departments of their company.
• Attract third-party consultants to survey employees of the company. Thanks to the external consultants, the importance of answers increases (with more frank responses).

How to Improve Service

Tatyana Grigorenko, Managing partner of 4b Solutions, Moscow

Consider general advice for improving the service in the company's work.

1. Surprise, affect emotions. Usually visitors in the office offer packaged tea or soluble coffee. We decided to pleasantly surprise our customers - the visitor is offered a choice of 6 species of professionally cooked coffee, 6 excellent tea varieties with branded chocolate for dessert.

2. Violate the rules. In the modern market it is ineffective to be like everything, you need to be better than the rest.

3. Listen to your customers. Need to ask customers that they will be interested?

How to create competitive advantages

When developing a competitive advantage you need to consider nine criteria for a successful option:

1) Uniqueness.

2) long term. Interest Competitive advantage should be at least three years.

3) Uniqueness.

4) plausibility.

5) attractiveness.

6) Have a REASONSTOBELIEVE (base for trust). Specific foundations that will make buyers to believe.

7) be better. Buyers should understand what this product is better than the rest.

8) to have the opposite. It is necessary to have the full opposite in the market. Otherwise, this will not be a competitive advantage.

9) brevity. It should be fit in a sentence with a duration of 30 seconds.

Step number 1. Making a list of all benefits

The benefits of goods are searched 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 properties that have a product 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 product quality: from the position of the target market;

- service and support;

- Assortment, variability.

2) price

What can be said about the price:

- price strategy entry into the market;

- Retail price: the selling price of the goods must necessarily relate to the desired retail price only if the company does not become the last link of the total sales chain.

- pricing for different sales channels; Different prices are assumed, depending on the specific link chain, a specific supplier;

- batch pricing: while implementing several goods of the company at special prices;

- policy in relation to promotional activities;

- availability of seasonal shares or discounts;

- The possibility of price discrimination.

3) place of sale

It is necessary to have the goods in the market in the right place so that the buyer can see it and purchase it in a suitable time.

What can I say about the mete of sale:

- sales markets, or on which it is planned to sell goods;

- Distribution channels for the sale of goods;

- type and conditions of distribution;

- conditions and rules for the calculation of goods;

- Logistics questions and stock management of goods.

4) Promotion

Promotion In this case implies 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 goods and re-purchases.

What can be said about promotion:

- Promotion strategy: Pull or Push. With the PUSH strategy, it is supposed to push the goods on the trading chain by stimulating intermediaries and trading personnel. Pull - "pulling out" products through the distribution chain by stimulating consumers, the final demand of its product;

- target values \u200b\u200bof knowledge, loyalty to brand and consumption at its target audience;

- the necessary marketing budget, SOV in the segment;

- the geography of its communication;

- Communication channels for contact with consumers;

- participation in specialized shows and events;

- Media strategy of her brand;

- PR strategy;

- promotions for the coming year, activities aimed at stimulating sales.

5) People

- employees who represent your product and company;

- trading personnel in contact with the target consumers of the product;

- consumers who are "leaders of opinions" in their category;

- manufacturers from which the quality of the goods may depend on;

- belong to this group and preferred consumer groups, including VIP clients and loyal buyers who generate sales for the company.

What can be said about working with people:

- programs for the formation of motivation, with the development of relevant competencies and skills from employees;

- Methods of working with people, on which the opinion of the consumer audience depends;

- Cograms of education and loyalty for their own trading staff;

- Feedback collection methods.

6) Process

This refers to the market of services and the B2B market. Under the "process" interaction between the company and consumers is interacted. It is this interaction that represents the basis of buying on the market with the formation of consumer loyalty.

• Unique Trading Offer: Examples, Development Tips

You can tell about the programs for improving the process of providing services to its target customers. The goal is to ensure the most comfortable conditions for buyers when purchasing and using the proposed service.

7) physical environment

It also refers to the service market and B2B. This term describes that the buyer surrounds during the purchase of a service.

Step number 2.Produce all benefits

To estimate the list, the three-point scale of the importance of characteristics is best suited:

1 point - the benefit of this characteristic for target consumers does not represent values;

2 points - the benefit is not primary, which stimulates the purchase of goods in the first place;

3 points - the benefit gain is one of the most significant properties of the proposed service.

Step number 3. Compare benefits from competitors.

The resulting list of characteristics should be compared with its competitors in two principles: the presence of this property has a competitor, is it better to have a competitor or you.

Step number 4. Look for absolute competitive advantages

Among the sources of absolute competitive advantages should be noted:

- the product is unique in one property or several;

- Wicliness by combination properties;

- special components of the composition of the product, a unique combination of ingredients;

- certain actions are performed better, more efficiently and quickly;

- the ospity of the appearance, form, packaging, method of sales or delivery;

- creation and implementation of innovation;

- unique technologies, methods for creating a product, patents;

- Calcification of personnel and the uniqueness of their human capital;

- the possibility of ensuring the minimum value in its industry, assuming higher profits;

- special terms of sales, post-sales service for consumers;

- availability of access to limited raw materials, resources.

Step number 5. Look for "false" competitive advantages

FIRST-MOVER. To declare the properties of competitors' goods first until they reported to their target audience about them;

Efficiency. Creating an indicator of efficiency assessment;

Curiosity and interest. It can be isolated thanks to the factor that, when buying, it is not considered to be determined, but will allow attracting the attention of the target audience.

Step number 6. Make a development plan and control

After identifying a competitive advantage, you need to form two further plan for marketing actions - a plan for the development of its competitive advantage for the next few years and a plan for preserving the relevance of the presented advantage.

How to analyze current competitive advantages

Stage 1. Make a list of rating parameters

Form the list of key competitive advantages of your product and competitors.

To evaluate, the three-point scale will be suitable, according to:

1 point \u003d parameter in the competitive advantages of the product is not fully reflected;

2 points \u003d not fully reflected parameter in a competitive advantage;

3 points \u003d fully reflected parameter.

3 stage. Make a development plan

Form your action plan aimed at improving the competitive advantage of the company. It is necessary to plan improvements on the items of the assessment, which were raised less than three points.

How to develop competitive advantages

Competitive behavior in the market can be three types:

Creative. Implementation of activities to create new components of market relations to obtain a competitive advantage in the market;

Adapted. Accounting for innovative changes in production, ahead of competitors regarding the modernization of production;

Providing guaranteed. The basis is the desire to preserve and stabilize the competitive advantages and market positions in the long term due to the addition of the range, quality improvement, additional services to consumers.

The duration of holding competitive advantages depends on:

Source of competitive advantage. It may be a competitive advantage of high and low order. The advantage of low order is presented by the possibility of using cheap raw materials, labor, components, materials, fuel and energy resources. It is easy to achieve low-order advantages can also be competitors through copying, searching for their sources of advantages. The advantage in the form of cheap labor can lead to negative consequences for the enterprise. With a low salary for repairmen, drivers, they can replace competitors. The benefits of high order are the excellent reputation of the company, specially trained personnel, production and technical base.

The number of explicit sources of competitive advantage in the enterprise. More competitive advantages from the enterprise will more seriously complicate the tasks of their competitors' pursuers;

Constant modernization of production.

How to survive the crisis and maintain competitive advantages

Alexander Idrisov, managing partner of Strategypartners, Moscow

1. Constantly hold your hand on the pulse of events. Someone from employees should be trained and analyzing information about the status and trends of the market, as these trends may affect the business, taking into account the study of consumer preferences, the dynamics of demand, investor data and competitors.

2. Develop the most pessimistic forecast for your company.

3. Focus on solvent customers.

4. Focus on a narrow circle of tasks. It is necessary to carefully examine the business model of your company. This does not mean that you need to abolish all directions of your activity. But emphasizes attention to a narrow range of tasks, refusing non-core problems or directions that can be transmitted to outsourcing.

• Reframing, or how to work with client objections

5. Consider the ability to combine with competitors. Many companies are now ready for alliances with competitors on mutually beneficial conditions.

6. Maintain relationships with potential investors. A particularly important condition during the crisis is not to lose contact with investors, they are better to activate them.

Information about the author and company

Alexander Marynko, Head of Projects of the Group of Companies "A DAN DZO", Moscow. He graduated from the Finance Faculty of Nizhny Novgorod State University. Participated in projects (more than 10, from them in six - as a manager), aimed at increasing the profitability of business companies and solving their systemic problems.

John Schel, SERVICEQUALITYINSTITUTUTE, Minneapolis, Minneapolis (Minnesota, USA). It is considered a height of the service strategy. At the age of 25, he founded a firm specializing in the training of companies in the culture of service. The author of five bestsellers on the service transferred to 11 languages \u200b\u200band sold in more than 40 countries of the world.

ServiceQualityInstitute companyformed by John Showl in 1972. Specializes in the development and implementation of a service strategy in companies. ServicequalityInstitute specialists trained more than 2 million people. The main office is located in Minneapolis, branches - worldwide (in 47 countries), their share is 70% of the total number of representative offices of the company. SERVICEQUALITYINSTITUTE and John Showla represents ServiceFirst company.

Tatyana Grigorenko, Managing partner of 4b Solutions, Moscow.

Company 4B Solutions.founded in 2004. Provides outsourcing and consulting services. Specialization areas are improving client service systems, anti-crisis management, professional legal and accounting support of the business. The staff of the company is over 20 people. Among customers - Association of Business Aviation, Triol Corporation, Rafamet Machinery (Poland), Ancs Group, IFR Monitoring, MediaArtsgroup, GaAstra boutique network.

Alexander Idrisov, Managing partner of Strategypartners, Moscow.

Strategypartners.Field of activity: Strategic consulting. Form of organization: LLC. Location: Moscow. Personnel number: about 100 people. Main Customers (Completed Projects): Atlant-M, Atlant Telecom, East, Gas, MTS, Press House, "Razgulay", "Rosenergoatom", "Russian cars", "Talosto", "Tractor plants", "Uralsvyazinform", "Tsaritsyno", "Education" publishing house, "Eksmo", Ministry of Information Technologies and Communications of the Russian Federation, Ministry of Regional Development of the Russian Federation, Murmansk Port, Rosprirodnadzor, Administration of the Arkhangelsk, Nizhny Novgorod, Tomsk regions and the Krasnoyarsk Territory, Avantix company.

Increasingly in texts on sites, I see a subtitle in the style of A la "Why are we?", Under which lists are inserted about this kind:

We are a dynamically developing company

We use only advanced technology.

We have professionals of their work

And so on ... At first glance, it seems, the text and the text that this is: everything is written. But let's look at this text carefully. It is assumed that competitive advantages are highlighted in this list. Competitive advantages - this is what is distinguished by the company from others.

And now tell me which adequate competitor will write:

Our company is in place and does not develop

The quality of our services is full of thrash

We have the most reversed technologies and archaic approaches

We employ only profans and amateurs

All clients we will bring under one comb

Exactly! No one will write like that. So it turns out that the advantages described in the first list are not at all advantages, because they also write competitors.

But that's not all

And now the most interesting ... in general, it is believed that the benefits of the company should help the consumer in choosing. Therefore, they must speak to the consumer that he receives by choosing this or that trademark. However, when companies are shouting everywhere: "We ... we ... We are ... What are we who are well done!", The consumer has a logical question: "Warning-ka, guys, and where are I here?"

The lack of orientation on the client is the most common mistake allowed by most authors of texts about the advantages. At the same time, special unicumes are managed instead of specifics and accessibility to extract the top of the "creative", which makes even greater confusion. For example:

For your clients, we make foam from Lakers

We clone ourselves to solve any tasks

We ignore the laws of space-temporary continium

Etc. However, you can argue the disadvantages as you like. Let's take a closer look at how to correctly describe the advantages.

How to describe the benefits of the company

For example:

"We use only advanced technology"

Changing on

"You save your time because we use only advanced technology"

2. In addition, the more specifics in the advantages - the stronger they will.

For example:

We provide the highest quality services

Changing on

"You are protected as a consumer. The quality of our services meets international quality standards ISO 0889.25 and ISO 0978.18. In addition, the guarantee for each of our service is 2 years. "

3. explicit indication of differences

Another effective tactic is the indication of the differences in the forehead. However, in this case, you also need to be maximum specific. For example:

"From competitors, us is distinguished by what:

On the territory of the city N, our bank and its partners have established over 5,000 ATMs, and therefore you will not experience any problems with the removal of cash.

Our bank has partnerships with banks of neighboring states, which means that you can freely go to related markets. "

☑ Tip: The example above can be strengthened by putting the second part (with the benefit) at the beginning, and the property of the bank is to the end of the sentence, tied by the Union "Because."

☑ Summary:

So, if you want to describe the benefits of a company by making them a working marketing tool, and not just enthusiastic about, try to make them specific and consumer-oriented. Avoid empty clichés and describe the benefits accompanying them with numbers, facts and cases.

⏱ reading time: 15 minutes

The purpose of the marketing strategy is to understand and cope with competition. Some companies are always ahead of others. Sectoral affiliation does not play roles - the gap in the profitability of companies inside one industry is higher than the differences between the industries.

Differences between companies are especially important during the crisis when a competitive advantage is excellent hopping for profitable growth.

Competitive advantages of the company

• Advantage - Any success factor that increases the readiness of the consumer to pay or reduces the cost of the company.
• Competitive advantage - Successful success factor for consumers for which the company exceeds all competitors

The formation of a competitive advantage means to achieve more, compared to competitors, gap between the costs and readiness of the buyer to pay for the product.

Step 1. Determine success factors

The answer to the question "how to form a competitive advantage of the company" is not so important. If you are confident that you achieve superiority over competitors by shipping 24/7, you will find a solution to how to implement this competitive advantage. It is much more difficult to determine - what exactly will it become.

For this purpose, we write out all the advantages, or success factors important for buyers. For example, here are.

Step 2. Segment the target audience

Separate shuttle for business class passengers is an advantage. But the achievement of this competitive advantage is completely indifferent for flying in the Economy segment. The definition of competitive advantages is always happening for a specific target audience segment - with its specific needs and desires.

The decision to sell "all" leads to questions where these "all" look for and what to offer them. It turns out that "everyone" should be looking for "everywhere" and offer "everything". Such a strategy will kill the budget of any company.

Take an example of achieving the competitive advantages of the company trading. Among the target audience, we highlight the segments of those who buys flowers impulsively, prepares a pre-planned gift or, say, decorates at home.

Identifying for whom we are going to form a competitive advantage, we will estimate whether it is worth it - we will give an assessment of the capacity of the market and the saturation of the competitive struggle in each segment.

More about the criteria of segmentation - in our article: ""

Step 3. Determine key success factors

Buyer is demanding. For him, many factors are important - from a smile consultant and site design to low prices. But if the buyer wants something, it does not mean that he is ready to pay for it.

The significance of a competitive advantage is the buyer's readiness to pay for it. The more money is ready to give for the development of competitive advantage - the higher its significance.

Our task made of a long list of various "Wishlists" of the consumer to form a very short list of key success factors that can determine the company's competitive advantages.

In our example, key success factors are the same for all three target audience segments. In real life, for each segment, there are usually 1-2 of their own factors.

Step 4. We estimate the importance of key success factors for the CA segments

What is important for one target audience segment may be a weak competitive advantage for consumers from another segment.

If you have come the idea to buy flowers to give them this evening, then for impulsive solution, the main appearance (completeness of the bulk opening) and the speed of purchase. It is more important than the opportunity to choose from a large range, the lifetime of a bouquet - it is necessary that the flowers be and look good in this evening.

The opposite situation is to buy colors for home decoration. Delivery does not "burn", but the question is how much the flowers will preserve, goes to the fore.

Therefore, the significance of key success factors is determined for each target audience segment separately.

*) We refine - the CFU is taken for an example, approximate to life, but not reflecting the real case.

For our company, the definition of the right competitive advantages that allow our customers to attract more consumers to receive more money from them and interact with them longer is one of the main blocks of the marketing strategy being developed. Therefore, we strive to achieve an ideal situation - when each cell of all tables of this article is expressed in money. You can only create a working marketing strategy. Only realizing the cost of KFU from the point of view of the buyer, the volume of the market, costs, etc.

All this information can be obtained. But sometimes it does not have time or resources. Then we advise you to use a comparison of a 5 or 10-point scale. In this case, remember that any actual data is better than guessing. Hypotheses must be retractable based on Big Data company, monitoring customer reviews, monitoring the process of selling competitors, and not take from the head "Because I think so." Expert forecasts are not working too often.

Step 5. Compare the achieved competitive advantages

By this time we figured out what is important for your consumers. It's good. It is bad that competitors are also aware.

To understand the starting conditions, it is necessary to assess the current degree of development of the company's competitive advantages. Strictly speaking, you have a competitive advantage only when your offer is superior to some key to the success of all direct competitors.

Evaluation of competitive advantages is made exclusively from the point of view of consumers. The opinion of the company's employees, and in particular the leadership does not mean anything. The director may pride in his idea by the site to which millions spent, but this in no way indicates the convenience of the site for customers.

Step 6. Determine the sources of competitive advantages.

Any competitive advantage is the result of the company's activities. Each action carries costs and at the same time affects the buyer's readiness to purchase a product. Differences in the results of these actions and form competitive advantages.

Therefore, we make a list of all the company's activities by degenerating its activities for individual processes. In projects, we begin an analysis from actions that are necessary for the production of a basic product or service, and only then add related activities.

Step 7. We associate key success factors and company activities

Competitive advantage is formed at the junction of various activities. For example, the growth of the range in color trafficking requires an increase in working capital, the availability of places for storing products, sufficient area of \u200b\u200bsales points, additional qualifications of sellers and service personnel, etc.

We define which business processes are associated with the development of each of the found competitive advantages and the size of their contribution.

Step 8. We estimate the cost of the company to create competitive advantages

At this step, we look at how much a competitive advantage is achieved. Any activity of the company has its costs.

In our example, we estimate the level of costs of a 10-point scale, but in real life the company must more or less accurately know its costs. Pay attention to the calculation method - usually an accountant is inclined most of the costs to record in production, thereby reducing indirect costs.

Using the cost size, determine their drivers. Why are the costs such as they are? Maybe we pay a lot for shipping, because the size of the business is small and we have no cargo? Cost drivers a lot. They depend on the scale of the firm, its geographical position, institutional factors, access to resources, etc.

The analysis of cost drivers helps to estimate the cost of competitors to create a similar competitive advantage. It is difficult to obtain data directly, but we can understand the drivers that affect the amount of costs, the volume of competitors' expenditure can be assumed.

Step 9. We are looking for resources to create a competitive advantage.

Maintain the achieved competitive superiority at a constant level is possible only if there are sufficient resources. In addition, the analysis of the resources that the company has helps choose the area of \u200b\u200brapid formation of a competitive advantage.

Step 10. We choose the direction for the development of a competitive advantage

We look at the two resulting final pictures and reflect on. There are only three opportunities to achieve a competitive advantage:

• increase readiness to buy a product without raising costs
• dramatically reduce costs, practically not affecting the willingness to buy
• increase willingness to buy and at the same time reduce costs.

Third direction looks most attractive. But finding such a decision is unusually difficult. Usually companies simply waste valuable resources trying to form a competitive advantage in all directions.

The main rules in determining the competitive advantage.

• We are looking for options that create the greatest gap between the buyer's desire to pay and our expenses.
• We are not trying to choose all attractive options at once. Deciding to occupy one peak, we will not climb on another. It is most profitable to choose a peak on which competitors are not crowded.
• I remember the competitors that drives each of them. If you decide to change some business process - how will react to this nearest rival?

• Success factors. The more find them, the better. Usually, habit managers are concentrated on several product characteristics. This reduces the idea of \u200b\u200bthe benefits that the consumer receives and brings closer to your marketing strategy with the competitors strategy. To find competitive advantages, a contest for which is not so strong, think about the advantages that the company creates for all stakeholders: consumers, employees, suppliers, dealers, etc.
• Key success factors. The fact that the factor is, the greater the restructuring of the company's activities, it requires. If you do not enter the company's leaders, it is better not to try to immediately compete on the main factors, or groups of factors ("best in quality")
• Market. The question should not sound "Will we be able to create a competitive advantage for this segment of the target audience", and "Will we be able to create a competitive advantage for this segment of the target audience and remain profitable." Having on the hands of the current costs, we assume - how much the company will pay for the transformation of a key success factor in a full-fledged competitive advantage
• Current competitive position. It is difficult to increase the competitive advantage that you are hopelessly behind. Especially if it is a capital-in-time process.
• Costs. Competitive advantage can be obtained by focusing on the costs that are most highly different from competitors, is large enough to influence the overall cost structure and are associated with separate activities.

Often the formation of a competitive advantage is hampered by fear. The desire to become the best will necessarily entail rise in prices or, on the contrary, decline in the desire to buy our product. The reduction in costs reduces the desire of the client to take advantage of our service (a ticket on the Looker is cheap, but you will not take a baggage with you, there are no food, airports are far away). Improving product characteristics leads to increased costs. It is absolutely normal. It is important only an increase in the gap between the buyer's readiness to pay and the company's expenses.

Step 11. We form competitive advantages by changing the actions of the company

As I wrote above - creating competitive advantages - the result of the company's actions. So that the offer is superior to all competitors, it is necessary to reconfigure part of the activities.

For example, achieving a competitive advantage "Low cost". It is pointless to try to compete with a discounter, just reducing prices. A successful discounter has become such due to the fact that most of the company's activities are subordinate to the creation of this competitive advantage. If Walmart employee wants to take a new handle, it returns the written old one. In the formation of a competitive advantage, there are no smallest things.

We again look at the connection of the selected competitive advantage and the company's activities. Where this is a competitive advantage. And invest in the development of selected business processes.

Ask yourself the following questions.

• Are our actions different from competitors' actions?
• Do we carry out the same actions, but in a different way?
• How to change the set of our actions to get a competitive advantage?

As a result, determine the minimum and sufficient set of activities that the company must comply with the competitive advantage. Usually try to copy only obvious things, forgetting that much is hidden under water. It is a complex of activity that creates a competitive advantage that cannot be copied.

Actions aimed at developing competitive advantages should be associated with uniform logic. The classic example of M. Port is a set of actions of Southwest Airlines, who created its competitive advantage. As a result, the airline was 25 years old was the only loupe of the market. It is impossible to achieve a similar competitive advantage from the skill.

In essence, this is a marketing strategy. Such a set of action is almost impossible to copy and exceed.

In the international market compete firms, not countries. It is necessary to understand how the company creates and holds a competitive advantage in order to understand the role of the country in this process. At the present stage, the competitive capabilities of firms are not limited to the limits of their country of basing. Special attention should be paid to the role of global strategies in creating a competitive advantage, since these strategies fully change the role of the country of basing.

Let's start with the basic principles of a competitive strategy. In competition in the domestic and international markets, many principles coincide. Then consider ways to enhance the competitive advantage through global rivalry.

Competitive strategy

To understand the nature of competition, the main unit is the industry (no matter, processing or from the service sector), that is, a group of competitors producing goods or services and directly competing among themselves. The strategically significant industry includes products with similar sources of competitive advantage. An example of this is the production of facsimile equipment, polyethylene, heavy trucks for long-distance transportation and equipment for molding from plastic under pressure. In addition, there may be related industries, whose products are the same buyers, production technology or sales channels, but they prevent their requirements for a competitive advantage. In practice, the boundaries between the industries are always very vague.

In many discussion on trade and competition, there are too general definitions of industries, such as "banking", "Chemical Industry" or "Mechanical Engineering". This is a very wide approach, as the nature of competition, and sources of competitive advantage vary significantly within each such group. For example, mechanical engineering is not a single industry, but dozens of industries with a different strategy, such as the production of equipment for weaving industry, for the manufacture of rubber products or for typography, and each has its own special requirements for achieving a competitive advantage.

Developing a competitive strategy, firms seek to find and embody the way profitable and lean to compete in their industry. Universal competitive strategy does not exist; Only a strategy agreed with the terms of the specific industry, skills and capital, which has a specific firm, can bring success.

The choice of competitive strategy is determined by two main points. The first is the structure of the industry in which the company has. The essence of competition in different industries varies greatly, and the likelihood of long-term profits in various industries is not the same. For example, the average profitability in the pharmaceutical industry and the production of cosmetics is very high, and in the release of steel and many types of clothing - no. The second major point is the position that the company occupies within the industry. Some positions are more beneficial than others, regardless of the average profitability of the industry as such.

Each of these moments in itself is not enough to choose a strategy. Thus, the firm in a very profitable industry may not get a big profit if it will incorrectly choose the position in the industry. And the structure of the industry, and the position in it can change. The industry can over time to become more (or less) "attractive" as the conditions for the creation of the industry in the country or other elements of the structure of the industry. The position in the industry is the reflection of the endless war of competitors.

The company can affect the structure of the industry, and to its position in its "table of ranks". Firms that are successful, not only respond to changes in the "environment", but also try to change it themselves to their benefit. A significant change in the situation in the competitive race entails changes in the structure of the industry or the emergence of new basics for a competitive advantage. Thus, Japanese firms that produce televisions entered world leaders due to the trend of transition to compact, portable TVs and replacing the lamp element base semiconductor. Company of one country intercept leadership from other countries if they are more able to respond to such changes.

Structural analysis of industries

The competitive strategy should be based on a comprehensive understanding of the structure of the industry and the process of its change. In any industry of the economy - it does not matter, it acts only in the domestic market or on the external, too, the essence of competition is expressed by five forces: 1) the threat of the emergence of new competitors; 2) the threat of the appearance of goods or services - substitutes; 3) the ability of suppliers of components, etc. to bargain; 4) the ability of buyers to bargain; 5) rivalry of existing competitors among themselves (see Figure 1).

Picture 1. Five forces determining competition in the industry

The value of each of the five strength changes from the industry to the industry and predetermines ultimately profitability of industries. In those sectors where the actions of these forces are favorable (let's say, in the production of soft drinks, industrial computers, in the software trade, in the production of drugs or cosmetics), numerous competitors can receive high profits from invested capital. In the same industries, where one or more forces act unfriendly (for example, in the production of rubber, aluminum, many metal products, semiconductor devices and personal computers), very few firms manage to maintain high profits.

Five competition forces determine the profitability of the industry, because they influence prices that can dictate firms to the expenses that they have to carry, and the amount of investment required in order to compete in this industry. The threat of the emergence of new competitors reduces the total potential of profitability in the industry, because they bring new production capacity to the industry and strive to get the market share market share, thereby reducing positional profits. Powerful buyers or suppliers, trading, benefit and reduce the profit of the company. The fierce competition in the industry reduces profitability, because in order to preserve competitiveness, it is necessary to pay (advertising costs, the organization of sales, research and development and development (R & D), or the profit "tears" to the buyer by reducing prices.

The presence of substitute goods limits the price that firms competing in this industry may request; Higher prices will enroll buyers to turn to the substitute and reduce production in the industry.

The value of each of the five competition forces is determined by the structure of the industry, that is, its main economic and technical characteristics. For example, the impact of the buyer is a reflection of such issues: how many buyers have; which part of the sales volume falls on one buyer; Is the price of goods a significant part of the total cost of the buyer (this makes the goods "sensitive to the price")? The threat of the emergence of new competitors depends on how difficult the new competitor to "implement" in the industry (this is determined by such indicators as loyalty to buyers of any brand, the scale of the economy and the need to connect to the network intermediaries).

Each sector of the economy is unique and has an inherent structure inherent in it. For example, in the pharmaceutical industry, it is difficult to introduce a new competitor, as we need huge costs for R & D and a large-scale economy during the sale of products to doctors. There is a long time to develop a substitute for an effective drug, and buyers at any time do not frighten high prices. The influence of suppliers is not essential. Finally, rivalry between competitors was and remains moderate and focused not on the reconstitution of prices, which reduces profits in the entire industry, and on other variable factors, for example, on R & D, which contribute to the increase in production in the entire industry. The presence of patents also scares those who ranged to compete by copying someone else's product. The structure of the pharmaceutical industry provides some of the highest income from invested capital in large industries.

The structure of the industry is relatively stable, but still can change over time. For example, the consolidation of sales channels of goods, which occurs in a number of European countries, enhances the impact of the buyer. Through its strategy, the company can also change all five forces in one direction or another. For example, the introduction of computer information systems in airlines makes it difficult to appear new competitors, because such a system costs hundreds of millions of dollars.

The structure of the industry is important for international competition for a number of reasons. First, given the different structure in various industries, it is necessary to fulfill different requirements for successful competition. For competition in such a fragmented industry, as a clothing release, completely different resources and skills are required than in aircraft industry. Conditions in the country for competition are more favorable in some industries than in others.

Secondly, often industries important for a high standard of living are just those that have an attractive structure. Industries with an attractive structure and mortgage conditions for new competitors (with respect to technology, specialized skills, access to sales channels, trademark reputation, etc.) are often associated with high labor productivity and give big profits from invested capital. The standard of living depends on the ability of the country's firms to be successfully implemented in the industry with a favorable structure. Reliable indicators of the "attractiveness" of the industry can not be the scale, the speed of growth or new technology (these features often attach great importance to businessmen or government officials engaged in planning), and the structure of the industry. Having aims at structurally non-showing industries, developing countries often incorrectly use the resources that they do not have much.

Finally, another reason for the importance of the structure of the industry in international competition is that the establishment of the structure creates real opportunities for the country to implement in new industries. Thus, the Japanese companies producing copying equipment began to successfully compete with American leaders in this area (specifically - Xerox and IBM) due to the fact that they turned to the market sector, left almost no attention (small-sized copiers), applied a new approach to the buyer (Sale through dealers instead of a straight sale), changed production (mass production instead of a small-seine) and approach to pricing (sale instead of renting, which is expensive to customer). This new strategy has facilitated the introduction into the industry and reduces the advantage of the previous leader. The way the conditions in the country indicate the firms way or force them to recognize the changes in the structure and respond to them is extremely important for understanding the "Success models" in international competition.

Position in the industry

Firms should not only respond to changes in the structure of the industry and try to change it themselves in their favor, but also to choose a position within the industry. This concept includes the approach of the company as a whole to competition. For example, in the production of chocolate, American firms (Hershey, M & M "S / MARS, etc.) compete due to the fact that they produce and sell in huge quantities of a relatively small set of chocolate varieties. On the contrary, Swiss firms (Lindt, Sprungli, Tobler / Jacobs and Dr.) Trade mainly refined and expensive products through narrower and specialized sales channels. They produce hundreds of product names, use the highest quality components and a longer production process. As this example shows, the industry's position is a company as a whole to competition. And not only its products or what it is designed for.

The position in the industry determines a competitive advantage. Ultimately, the firm bypass their rivals if they have a solid competitive advantage. A competitive advantage is divided into two main types: lower costs and differentiation of goods. Low costs reflect the body's ability to develop, produce and sell comparable goods with less costs than competitors. Selling goods on the same (or approximately the same) price as competitors, the firm in this case receives a big profit. Thus, Korean firms that produce steel and semiconductor devices won over foreign competitors in this way. They produce comparable goods with very low costs, using low-paid, but highly productive labor and modern technology and equipment purchased abroad or manufactured under license.

Differentiation is the ability to provide a buyer with a unique and greater value in the form of a new product quality, special consumer properties or after-sales service. Thus, German machine-tool firms compete using differentiation strategy based on high technical characteristics of products, reliability and rapid maintenance. Differentiation allows the company to dictate high prices that, with equal costs with competitors, again gives great profits.

The competitive advantage of any type gives higher productivity than competitors. The company with low cost of products produces this cost at less costs than competitors; The company with differentiated products profit from a unit of products is higher than that of competitors. Thus, a competitive advantage is directly related to the formation of national income.

It is difficult, but still you can get a competitive advantage based on and lower costs and differentiation6. It is difficult to do this because providing very high consumer properties, quality or excellent service inevitably leads to the rise in the cost of goods; It will cost more than if strive to just be at the level of competitors. Of course, firms can improve technology or production methods so as to simultaneously reduce costs and strengthen differentiation, but ultimately competitors will do the same and force to decide on what type of competitive advantage to focus.

Nevertheless, any effective strategy should pay attention to both types of competitive advantage, although it is strictly adhering to one of them. The firm focused on low costs should nevertheless provide acceptable quality and maintenance. Similarly, the product of the company producing differentiated products should not be so more expensive than the goods of competitors so that it was to the detriment of the company.

Another important variable value that determines the position in the industry is the scope of competition, or the latitude of the goal on which the firm is focused within its industry. The company must decide for himself how many varieties of goods it will be released by what channels to use which circle of buyers to serve, in which areas of the world sell their products and in which related industries it will compete.

One of the reasons for the importance of the sphere of competition is that the industries are segmented. Almost every industry has clearly defined varieties of products, numerous distribution channels and sales and several types of buyers. Segmentation is important because in different sectors of the market - different requests: the usual men's shirt sold without any advertising, and the shirt created by the famous fashion designer is designed for buyers with very different requests and criteria. In both cases, we have a shirt, but for each there is its own type of buyer. In different sectors of the market require different strategies and different abilities; Accordingly, the sources of competitive advantage in different sectors of the market are also very different, although these sectors are "serviced" by the same industry. And the situation when the firms of one country achieve success in one market sector (for example, Taiwanese firms - in the release of cheap leather shoes), and the firms of another country in the same industry - in another sector (Italian firms - in the production of model leather shoes) - not rarity.

The scope of competition is also important because the firms can sometimes get a competitive advantage by the scale of the goals set, competing around the world, or the use of links between sectors, competing in related industries. For example, Sony receives a big advantage of the fact that a variety of radio-electronic goods with its brand are produced worldwide, using its technology and apply through its channels. The relationships between well-separated sectors arise due to the community of important activities or skills in firms competing in these industries. Sources of advantages in competition worldwide will be disassembled below.

Firms in the same industry can choose different areas of competition. Moreover, it is typical that the firms of different countries in the same industry choose different areas of competition. Mostly the choice is: compete on the "wide front" or aim to some one market sector. Thus, in the production of packaging equipment, German firms offer lines of equipment for a wide range of targets, and Italian tormented focus on highly specialized equipment used only in certain sectors of the market. In the automotive industry, leading American and Japanese firms produce a whole range of cars of different class, while BMW and Daimler-Benz (Germany) are primarily producing powerful, high-speed and expensive top-class cars and sports cars, and the Korean companies Hyundai and Daewoo focused on on small and supermarital machines.

The type of competitive advantage and the sphere in which it is achieved can be combined into the concept of typical strategies, that is, completely different approaches to what is high indicators in the industry. Each of these architect strategies shown in Figure 2 is fundamentally different from the previous concept of how to compete and achieve success in competition. For example, in shipbuilding, Japanese firms elected the differentiation strategy and offer a wide selection of high-quality vessels at high prices. Korean shipbuilding firms chose the leadership strategy at the expense of costs and also offer a variety of types of ships, but not higher, but just good quality; However, the cost of Korean courts is less than Japanese. Strategy of succeeding Scandinavian shipyards - focused differentiation: they produce mainly specialized types of ships, such as icebreakers or cruise liners. With their manufacture, specialized technologies are applied, and these vessels are sold on a very high price to justify labor costs, which in the countries of Scandinavia is expensive. Finally, Chinese shipbuilders, who recently become actively competing in the global market (strategy - concentration at the cost level), offer relatively simple and standard ships with even less costs and at even lower prices than Korean.

Figure 2. Typical strategies

On the example of typical strategies it becomes clear that no strategy is suitable for all industries. On the contrary, many strategies are perfectly combined in many industries. Moreover, the structure of the industry limits the choice of possible strategy options, but you will not meet the industry in which only one strategy can bring success. In addition, options for typical strategies with different methods of differentiation or focusing are possible.

The concept of typical strategies is based on the idea that each of them is based on a competitive advantage and that in order to achieve it, the firm must choose its strategy. The firm must decide which type of competitive advantage it wants to get and in what area it is possible.

The biggest strategic mistake in the desire to "chase all the hares", that is, to use all competitive strategies at the same time. This is the right way to strategic mediocreness and niquetic indicators, because the firm trying to use all the strategies at the same time will not be able to use any of them because of their "built-in" contradictions. An example of this is the same shipbuilding: Spanish and British shipbuilding companies come into decay, because the costs of their products are higher than that of Koreans, the databases for differentiation compared to the Japanese they do not have (that is, they do not produce anything that the Japanese would not produce ), And find any segments of the market, where you can get a competitive advantage (as, for example, Finland in the icebreaking court market), they could not. Thus, they have no competitive advantage, and they keep mainly at the expense of state orders.

Sources of competitive advantage

A competitive advantage is achieved on the basis of how the firm organizes and performs certain types of activity. Actions of any firm are divided into different types. For example, sales agents conduct telephone conversations, maintenance techniques perform repairs at the request of the buyer, scientists in the laboratory are developing new products or processes, and financiers are increasing capital.

Through this activity, the company creates certain values \u200b\u200bfor their customers. The ultimate value created by the firm is determined by how much customers are willing to pay for goods or services offered by the company. If this amount exceeds the cumulative expenses for all necessary activities, the company is profitable. To get a competitive advantage, the company should either give customers about the same value as competitors, but to produce goods with less costs (smaller cost strategy), or to act as to give customers a product with greater value for which you can get a big price ( Differentiation strategy).

Activities for competition in any given industry can be divided into categories as shown in Figure 3. They are combined into the so-called value chain. All activities included in the value chain are contributing to the consumer value. They can be divided into two categories: primary activity (permanent production, sales, delivery and service of goods) and secondary (providing production components, somehow: technology, human resources, etc., or providing infrastructure functions in support of other activities ), that is, supporting activities. Each type of activity requires purchasing "components", human resources, a combination of certain technologies, and the infrastructure of the company is based on the management and financial activities.

Chosen by the company The competitive strategy determines the method that the company performs certain types of activity, and the entire value chain. In different industries, specific activities have different meanings to achieve a competitive advantage. Thus, in the production of printed presss for success, the development of technology, assembly quality and after-sales service are obligatory; In the production of detergents, the main role is played by advertising, since the manufacturing process is notes here, and there is no after-sales service.

Firms receive a competitive advantage, developing new ways to perform activities, introducing new technologies or initial components of production. For example, the Japanese company Makita entered the leaders in the production of power tools through the use of new, cheaper materials and the sale of standard models of tools manufactured at a single factory all over the world. Swiss firms that produce chocolate achieved recognition in the world, since a number of new recipes were first introduced (including creamy chocolate) and applied new technologies (for example, continuous mixing of chocolate mass), significantly improved quality of finished products.

Figure 3. Chain of value

But the firm is not only the sum of all types of its activities. The value chain of the company is a system of interdependent activities, between which there are links (Linkages). These relationships occur when a method of any type of activity affects the cost or effectiveness of others. Communications often lead to the fact that additional costs with the "fit" of certain types of activities are paying off in the future. For example, more expensive design and components or more careful quality control make it possible to reduce after-sales service costs. Firms should go on such costs in accordance with their strategy in the name of a competitive advantage.

The presence of connections also requires the coordination of various activities. In order not to disrupt the delivery time, for example, it is necessary that the production, provision of supply of raw materials and components, auxiliary activity (for example, commissioning works) were well linked. Clear approval ensures the timely delivery of the goods to the customer without the need to have expensive means of delivery (that is, a large park of cars, when you can do after small, etc.). Coordination of activities related to each other reduces costs when conclusted transactions, gives more clear information (which facilitates the management) and allows you to replace expensive operations in one form of more cheap operations in another form. It is also an effective way to reduce the overall time required to perform different activities, which is increasingly important for competitive advantage. For example, such coordination significantly reduces the development time and launch into the production of new goods, as well as receiving orders and delivery of goods.

Careful bond management can be a decisive source of competitive advantage. Many of these ties are not thrown into the eyes, and competitors can not notice them. In order to benefit from these connections, both complex organizational procedures are needed, and the adoption of compromise solutions in the name of the benefits later, including in cases where the organizational lines do not intersect (such cases are rare). Japanese firms especially succeeded in controlling relations. With their filing, the practice of mutual "imposition" of the stages of developing new goods in order to simplify their release and reduce development time, as well as increased control over the quality "on the stream" to reduce after-sales service costs.

To achieve competitive advantages should be approached by a value chain as a system, and not as a set of components. Changing the value chain by permutation, rearrangement or even exceptions from it of individual activities often leads to a significant improvement in competitive position. An example of this is the production of electrical equipment. Italian firms in this area completely changed the manufacturing process and used a completely new sales channel, thanks to which they became leaders of world exports in the 1960-1970s. Japanese photographic production firms have entered world leaders, putting one-leeble chambers-mirrors to flow, introducing automated mass production and for the first time in the world, putting the massive sale of such cameras.

The value chain of a separate company used in competition in this industry enters a larger system of activity that can be called a value system (see Figure 4). It includes suppliers of raw materials, components, equipment and services. On the way to the final consumer, the goods of this company often passes through the value chains of sales channels. In the end, the goods become a cumulative element in the value chain of the buyer, which uses it when performing its activities.

Figure 4. Value system

The competitive advantage is increasingly determined by how well the company can organize the entire system. The aforementioned bonds not only connect the various types of activity of the company, but also determine the mutual dependence of the company, seids and sales channels. The firm can achieve a competitive advantage, better organizing these ties. Regular and timely supplies (this practice was first introduced in Japan and received the name "Canber") there may reduce the operating expenses of the company and allow to reduce the required level of stocks. However, the opportunities to save due to the coordination of links are not limited to providing supplies and reception of orders; This also includes R & D, after-sales service and many other activities. Both the company itself, and its adjoins, and the sales network can gain a win, if you can recognize and use such connections. The ability of firms of this country to use links with suppliers and buyers in their country to a large extent explains the competitive positions of the country in the relevant industry.

The value chain allows you to better understand the sources of winning in the cost level. The cost gain is determined by the amount of costs in all necessary activities (compared to competitors) and may arise at any stage. Many managers consider the costs too narrowly, closing in the manufacturing process. However, firms leading through cost reduction are achieving winning and by developing new, cheaper goods, applying less expensive marketing, reducing service costs, that is, they remove the gains in costs from all the links of the value chain. In addition, a careful "fit" is most often required to get a thorough "fit" not only with connections with suppliers and a trading network, but also within the firm.

The value chain also helps to understand the reserves for differentiation. The company creates a special value for the buyer (and this is the meaning of differentiation), if it gives the buyer such savings or such consumer properties that he cannot get, buying a competitor's goods. In fact, differentiation is the result of how the goods related to services or other activities of the firm affect the buyer's activities. The firm and its customers have many points of contact, each of which can be a source of differentiation. The most obvious of them shows how the goods affect the buyer's activities in which this product is used (let's say, a computer used to receive orders, or a means for washing clothes). Creating additional values \u200b\u200bat this level can be called first-order differentiation. But almost all goods have a much more complex influence on buyers. Thus, the structural element included in the product acquired by the buyer should be credited and - in case of refusal to all the product - renovated as part of the goods sold to the final customer. At each stage of such an indirect influence of the goods on the buyer's activities, new opportunities for differentiation are opened. In addition, almost all types of activity of the company in one way or another affect the buyer. For example, selection firm developers can help embed a component to the final product. Such high-order links between the company and clients are another potential source of differentiation.

In different industries, the database for differentiation is different, and it is of great importance for the competitive advantage of countries. There are several clearly distinguished types of relations "Firm - Customer" relations, and firms of different countries use various approaches, improving them. Swedish, German and Swiss firms often achieve success in those sectors where close cooperation with customers is required and large after-sales requirements are presented. On the contrary, Japanese and American firms flourish where the product is more standard.

The concept of value chain makes it possible to better understand not only the types of competitive advantage, but also the role of competition in its achievement. The competing scope is important because it determines the activities of the company, ways to perform this activity and the configuration of the value chain. So, by choosing a narrow target market segment, the company can accurately adjust its activities to the requirements of this segment and due to this potentially gain gains in costs or in differentiation compared to competitors who worked for a wider market. At the same time, the sight on a wide market can give a competitive advantage if the firm is able to act in different segments of the industry or even in several interconnected industries. Thus, German chemical companies (BASF, Bayer, Hoechst, etc.) compete in the release of the most diverse chemical products, but separate groups of products are produced on the same plants and have common sales channels. Similarly, Japanese consumer electronics companies, such as Sony, Matsushita and Toshiba, win, acting in related industries (TV, audio equipment and video recorders). They use the same trademarks for these goods, sales channels worldwide, general technology and joint procurement.

An important reason for the competitive advantage is that the firm chooses the sphere of competition other than that they have chosen competitors (other market segment, the region of the world), or connecting products related industries. For example, Swiss hearing apparatus firms focused on devices with high power designed for people with serious hearing impairments, thanks to which surpassed American and Danish competitors working on a wider front. Another common admission to enhance the competitive advantage is to be among the first firms that have passed to global competition, while other domestic firms are still limited to the domestic market. The bazing country plays an important role in how these differences in competition are manifested.

Firms achieve a competitive advantage, finding new ways of competition in their industry and leaving them to the market, which can be called in one word - "innovation". The innovation in a broad sense includes improving technology, and improving methods and methods of business. Specifically, the update can be expressed in changing the product or production process, new approaches to marketing, new ways of distributing goods and new concepts of competition sphere. Innovators not only capture the possibility of change, but also make these changes occur faster. Strictly speaking, most of the changes are evolutionary, and not radical; Often the accumulation of small changes gives more than a major technological breakthrough. Moreover, truth is often confirmed that "new is well forgotten old": many new ideas for calibration are not so new, they just did not work out. The innovation is equally the result of improving the organizational structure and R & D. It always implies investments in the development of skills and knowledge, and most often both in fixed assets and additional marketing efforts.

The innovation leads to a change in leadership in competition if other competitors have not been recognized as a new way of doing business, or may not or do not want to change their approach. The reasons for this are the mass: the grace and complacency, the inertia of thinking (wary of attitude to the new one), funds embedded in specialized funds and equipment (this "connects hands"), and finally, there may be "mixed" motifs. It was such "mixed" motives, for example, at Swiss watch firms, when the American firm Timex threw a cheap clock to the market, not subject to repair, and the Swiss were all afraid to undermine the image of their watches as the equivalent of quality and reliability. In addition, their plants turned out to be completely unsuitable for the mass production of cheap products. Nevertheless, without a new approach to competition, the challenge rarely achieves success (if only he does not change the nature of the competition). Recognized leaders most often will immediately take decisive response and "will distort for themselves."

In the international innovation market, giving a competitive advantage, anticipate new needs and in the country of basing, and abroad. So, with the growth of world concerns of the safety of goods Swedish companies Volvo, Atlas Copco, AGA and others succeeded, because there was such a development of events in advance. However, the innovations undertaken in response to the situation specific to the domestic market can achieve the effect inversely desired - to push the country's success in the international market!

The possibilities of the emergence of new ways of competition usually stem from any "break" or changes in the structure of the industry. And it happened that the possibilities that appeared with such changes were left unnoticed for a long time.

Here are the most typical causes of innovations that give a competitive advantage:

1. New technologies. Changing technology can create new opportunities for product development, new ways of marketing, production or delivery and improving related services. It is it that most often precedes strategically important innovations. New branches appear when changing technology makes it possible to appear a new product. So, German firms became the first on the X-ray equipment market, because X-rays were open in Germany. The change of leadership is most likely occurring in those sectors where a sharp change in technology makes outdated knowledge and funds of previous leaders in the industry. For example, in the same X-ray and other types of medical equipment of this purpose (tomographs, etc.), Japanese firms overtook German and American competitors due to the emergence of new technologies based on electronics, which allowed replacing traditional X-rays.

Firms, "Ingrown" to the old technology, it is difficult to understand the meaning of the new, which has just appeared, and respond to it - even more difficult. So, leading American firms that produced radiologist - RCA, General Electric, Gte-Sylvania - joined the production of semiconductor devices, and everything is unsuccessful! The same firms that took up the release of semiconductor devices from scratch (for example, Texas Instruments) turned out to be more committed to new technologies, more adapted to it in terms of personnel and management, had the right approach to how this technology is developed.

1. New or changed customer requests. Often, a competitive advantage occurs or goes out of hand to hand when buyers have completely new requests or their views on what is good and what is bad, "change dramatically. Those firms that have already gained in the market may not be noticed or not to respond properly, because in order to respond to these requests, you need to create a new value chain. Thus, American fast food companies have achieved advantages in many countries, because customers needed cheap and always affordable food, and restaurants responded to this requirement slowly, because the network of fast food snack bars works completely differently than the traditional restaurant.
2. The emergence of the new segment of the industry. Another possibility of obtaining a competitive advantage appears when a completely new segment of the industry is formed or there are rearrangement of existing segments. There is a possibility not only to go to a new group of buyers, but also find a new, more efficient way to produce some types of products or new approaches to a specific group of buyers. A bright example is the production of forklifts. Japanese firms found a segment departed by the attention - small-sized multipurpose forklifts - and took him. At the same time, they achieved the unification of models and highly automated production. From this example, it can be seen how, holding a new segment, you can strongly change the value chain, which may be a very difficult task for competitors already affirmed in the market.
3. Change value or presence of production components. A competitive advantage often moves from hand to hand due to changes in the absolute or relative value of components, such as labor, raw materials, energy, transport, communication, media or equipment. This indicates the change in the conditions from suppliers or the ability to use new or other components on its qualities. The company achieves a competitive advantage, adapting to new conditions, while competitors are connected by the hands and legs of capital investments and tactics adapted to the old conditions.

A classic example is a change in the ratio of the cost of labor between countries. So, Korea, and now other Asian countries have become strong competitors in relatively simple international construction projects, when salary increased dramatically. Recently, a sharp drop in transport prices and communication opens up opportunities to organize the management of firms in a new way and thus get a competitive advantage, such as the opportunity to rely on specialized directors or deploy production worldwide.

1. Changing government regulation. Changing government policy in areas such as standards, environmental protection, new branches and trade restrictions, is another common incentive for innovations that entail a competitive advantage. The existing market leaders have adapted to certain "rules of the game" by the government, and when these rules suddenly change, they may not be able to respond to these changes. American stock exchanges won the reduction in regulation in the securities markets in other countries, because the United States first introduced such a practice, and by the time it spread throughout the world, American firms have already managed to adapt to it.

It is important to quickly react to the change in the structure of the industry.

The above can give firms a competitive advantage if the firms will understand their importance and will take a decisive offensive. In very many industries, such "early birds" (Early Movers) decades hold leadership. So, German and Swiss companies, dyes, - Bayer, Hoechst, Basf, Sandoz, Ciba and Geigy (subsequently united in Ciba-Geigy) - reached the leaders before the First World War and did not pass positions until now. Procter & Gamble, Unilever and Colgate are world leaders in the production of detergents since the 1930s.

"Early Ptkah" receive an advantage, first using the effect of scale, reducing the costs due to intensive personnel training, creating a corporate identity and relationship with customers at a time when tough competition is not yet, having the opportunity to choose distribution channels or getting the most profitable placement of factories and the most Favorable sources of raw materials and other factors of production. A quick response to a new situation can give the firm the benefits of a different kind, which may be easier to keep. In the innovation itself, competitors can copy, but the benefits obtained by him often remain for the company-Novator.

"Early birds" most benefit in those industries where the scale of scale is of great importance and where the customers are tightly held behind their directors. In such conditions, it is very difficult to challenge the competitor well in the market. As long, the "Early Ptashka" will be able to keep the advantage, it depends on how changes will appear in the structure of the industry, which will reduce this advantage. For example, in the production of packaged consumer goods, the buyer's loyalty to any given brand of goods is very strong and the situation changes are insignificant. Such firms such as Ivory SOAP, M & M "S / MARS, Lindt, Nestle and Persil, retain positions for more than one generation.

Each important change in the structure of the industry creates the possibility of the emergence of new "early birds". Thus, in the production of hours, the emergence in the 1950s and 1960s of new sales channels, mass marketing and mass production allowed American firms Timex and Bulova to bypass Swiss competitors in terms of sales. Later, the transition from the mechanical clock to the electronic created a "breakthrough", which allowed SEIKO Japanese firms, Citizen, and then Casio ahead. That is, the "early birds", which won in one generation of technology or product, may well be in losing when changing generations, since their investment and skills have a specialized nature.

But the given example of the clock industry reveals another important principle: "Early Ptashchi will succeed only if you are able to correctly predict changes in technology. American firms (for example, Pulsar, Fairchild and Texas Instruments), among the first, took up the release of electronic hours, based on their positions in the release of semiconductors. But they tried on the clock with LED indication (s), and the LEDs were inferior and liquid crystal indicators (LCD) in cheaper time models, and the traditional shooting indication in combination with a quartz mechanism in more expensive and prestigious models. The company SEIKO decided not to release the clock from Sadi, and from the very beginning I did the focus on the clock with the LCD and the quartz shooting hours. The introduction of the LCD and quartz watch mechanisms provided Japan leadership on the mass of hours, and SEIKO is the world leadership in the industry.

Notice new and introduce it

In the process of updating, the information is played a big role: information that competitors are not looking; information inaccessible to them; Information available to everyone, but processed in a new way. Sometimes it is received by investing money in the market research or in R & D. And yet, it is amazing often in the role of innovators are firms that are just looking for where it is necessary, not complicating their lives with superfluous arguments.

Often, innovations come from outsiders in the industry. In the role of an innovator, a new company can act, the founder of which came to this industry with an unusual way or simply was not assessed in dignity in the old company with traditional thinking. Or in the role of innovator managers and director, previously not worked in this industry, and therefore more capable of seeing the opportunity for innovation and more actively conducting these innovations into life. In addition, innovations may arise when the firm expands the scope of activity and introduces new resources, skills or prospects to another industry. Another country with other conditions or methods of competition can be a source of innovations.

"Third-party" people or firms often can rather see new opportunities or have other than that of long-time competitors, skills and resources - just those that need to compete in a new way. The leaders of innovators - often outsiders also in a hidden, social sense (not in the sense that they are garbage of society), they simply do not belong to the industrial elite, they are not even recognized as full competitors, and therefore they will not stop before To disrupt the established rules or even use not too honest competition methods.

With the rare exception of innovations get the cost of tremendous effort. Success in the application of new or improved ways of competition is the company that persistently oppresses its line, despite all the difficulties. There is a strategy of "lonely wolf" or a small group. As a result, innovations are often the result of the need, and even the threat of collapse: the fear of the defeat stimulates much stronger than hope for victory.

According to the above reasons, innovations often proceed not from recognized leaders and not even from large companies. The effect of scale in the implementation of R & D playing on the hand to large firms is not as important, since many innovations do not require complex technology, and large companies, due to various reasons, are often not able to see the change in the situation and respond quickly to it. In our study, along with large firms, smaller are analyzed. In the same cases, large firms were in the role of innovators, they often performed both newcomers in the same industry, having a strong position in another.

Why some firms can recognize new ways of competition, and others not? Why are some firms guess such methods before others? Why are some companies or rather guess the direction in which technology will develop? Why are such tremendous efforts to search for new paths? These intriguing issues will be the main in subsequent chapters. Answers should be sought in such concepts as a choice of directions for the basic efforts of the company, the availability of the necessary resources and skills, as well as which forces have influenced changes. In all this, a large role is played by the National Environment. In addition, the degree in which the conditions in the country favor the emergence of the aforementioned outsiders of domestic origin and thereby do not give foreign firms to the leadership from the country in the existing or new industries, largely determines the national prosperity.

Hold advantage

How long can be held a competitive advantage depends on three factors. The first factor is determined by what the source of the advantage. There is a whole hierarchy of sources of competitive advantage in terms of their retention. The advantages of low rank, such as cheap labor or raw materials, can be quite easy to get competitors. They can copy these advantages, finding another source of cheap labor or raw materials, or to reduce them for no, producing their products or drawing resources in the same place where the leader. For example, in the release of household electronics, the advantage of the workforce price of Japan has long been korea and Hong Kong. In turn, their firms are already threatened by a large cheapness of labor in Malaysia and Thailand. Therefore, Japanese electronic firms translate production abroad. Also on the lower stages of the hierarchy there is an advantage based exclusively on the factor of the scale of the use of technologies, equipment or methods taken from competitors (or affordable). Such an effect of scale disappears when the new technology or methods make the former outdated (similarly when a new type of product appears).

The advantages of a higher order (patented technology, differentiation on the basis of unique goods or services, the reputation of a company based on enhanced marketing activities, or close connections with clients, strengthened by the fact that the customer will be changed to change the provider) can be held for a longer time. They are inherent in certain features.

First, in order to achieve such advantages, large skills and abilities are required - specialized and more trained personnel, appropriate technical equipment and in many cases close ties with the main clients.

Secondly, the advantages of high order are usually possible under the condition of long-term and intensive investments in production facilities, in specialized training of personnel, often conjugate with risk in conducting R & D or marketing. The performance of certain types of activities (advertising, sales products, R & D) creates material and intangible values \u200b\u200b- the reputation of the company, good relations with customers and the base of special knowledge. Often the first responds to the changed situation is the firm that longer than competitors invested in these activities. Competitors will have to invest for the same means, if not more to get the same advantages, or to invent ways to achieve them without such major expenses. Finally, the most long-held advantages are a combination of large capital investments with higher quality activities, which gives advantages of a dynamic nature. Permanent investments in new technologies, marketing, the development of a network of branded service worldwide or to the rapid development of new products further complicate the task of competitors. The advantages of a higher order not only are preserved longer, but also associated with a higher level of productivity.

Benefits based on only the level of costs, as a rule, are not so racks, as based on differentiation. One of the reasons for this is that any new source of cost reduction, no matter how simple it, can deprive the firm advantages in terms of expenses. So, if the workforce is cheaper, you can get around the company with a much higher productivity, while in the case of differentiation, to get around the competitor, you need, as a rule, to offer the same set of goods, if not more. In addition, the benefits based on only costs are more vulnerable also because the emergence of new products or other forms of differentiation can destroy the advantage obtained in the production of old goods.

The second determining retention of a competitive advantage is the number of competitive advantages available among explicit sources. If the company relies only for any one advantage (say, less expensive design or access to cheaper raw materials), competitors will try to deprive it of this advantage or find a way to get around it, guessing something else. Firms, long years holding leadership, seek to ensure their own more advantages in all links of the value chain. Thus, Japanese small-sized copying devices have modern design features that increase the convenience of use, they are cheap in production due to the high degree of flexible automation, sold through a wide network of agents (dealers) - it provides a more numerous clientele than traditional direct sale. In addition, they have high reliability, which reduces after-sales service costs. The presence of a large number of benefits to competitors significantly complicates the last task.

The third and most important reason for maintaining a competitive advantage is the constant modernization of production and other activities. If the leader, reaching advantage, will rest on the laurels, almost any advantage over time will be copied to competitors. If you want to save the advantage, you can not stand still: the company must create new advantages at least at the same speed, with which competitors can copy the existing ones.

The main task is to continuously improve the company's performance in order to strengthen the existing benefits, for example, more efficiently exploit production capacity or organize more flexible customer service. Then competitors will be even harder to bypass it, because for this they will need to urgently improve their own indicators, for which they may simply do not have enough strength.

Nevertheless, ultimately in order to keep a competitive advantage, it is necessary to expand the set of its sources and improve them, switch to the advantages of a higher order that are preserved longer. That is what Japanese automotive companies were admitted: initially they went to foreign markets with inexpensive small-class machines and sufficiently high quality, achieving success due to cheap labor. But even then, even having this advantage, the Japanese roads began to improve their strategy. They began to actively invest in the construction of large plants with modern equipment and benefit from the effect of scale, then it began to update the technology, the first to introduce the system "exactly in time" ("Just In Time") and a number of other methods of improving quality and efficiency. It gave a higher quality than foreign competitors, and, as a result, the reliability and satisfaction of buyers in goods. Recently, Japanese automotive firms have reached the leaders in technology and introduce new trademarks with increased consumer properties.

To save the benefits, changes are needed; Firms should benefit from the trends observed in the industry, by no means ignoring them. Firms must also invest in order to protect areas vulnerable to competitors. So, if biotechnology threatens a change in the direction of research in the pharmaceutical industry, a pharmaceutical company, seeking to maintain a competitive advantage, should, without delay, create a biotechnology base, superior to the one in service with competitors. Nadezhda for failures of the new technology used by the competitor, ignoring the new market segment or sales channel - explicit signs that the competitive advantage eats. And such a reaction, alas, meets completely and nearby!

To hold positions, firms sometimes have to abandon their benefits to achieve new ones. For example, Korean shipbuilding firms entered world leaders only when they sharply increased the capacity of the shipyards, significantly increased efficiency at the expense of new technologies, while reducing the need for labor, and mastered the release of more complex types of ships. All these measures reduced the value of labor costs, although at that time Korea had an advantage in this regard. The seeming paradox consisting in the refusal of previous advantages, often acts scaretime. Nevertheless, if the company does not make this step, no matter how difficult and contrary to common sense it seems, it will make competitors for it and will eventually benefit. The way "Wednesday" encourages firms to similar steps, will be considered later.

The reason that only a few firms manage to keep leadership, it lies in the fact that any successful organization is extremely difficult and unpleasantly changing the strategy. Success gives birth to complacency; The success of the strategy becomes routine; The search and analysis of the information that could change it is stopped. The former strategy acquires the halyon of holiness and infallibility and deeply rooted in the thinking of the company. Any offer to make a change is regarded almost as the betrayal of the interests of the company. Successful firms are often looking for predictability and stability; They are entirely engaged in preserving the achieved positions, and making changes is constrained by the fact that there is something to lose. It is about to replace the old advantages or add new ones, they are thinking only when nothing remains from old advantages. And the old strategy has already been hospitalized, and when changes occur in the industry structure, leadership changes. Innovators and new leaders are small firms, which are not related to history and former investments.

In addition, the change of strategy is also blocked by the fact that the previous strategy of the company is embodied in the skills, organizational structures, specialized equipment and reputation of the company, and with the new strategy they can "not earn". This is not surprising, because just on such a specialization and the benefits are based. Perestroika value chain is a difficult and expensive process. In large companies, in addition, the scale itself makes it difficult to change the strategy. The process of changing the strategy often requires financial victims and troublesome, often painful changes in the firm's orgstructure. Firms, not burdened with old strategy and former investments, adopting a new strategy, will probably be cheaper (in a purely financial plan, not to mention smaller organizational issues). This is one of the reasons that the outsiders mentioned above act in the role of innovators.

Further, tactics aimed at keeping a competitive advantage, for firms entrenched in the industry, in many respects something unnatural. Most often companies overcome the inertia of thinking and interference with the development of advantages under pressure from competitors, the impact of buyers or difficulties in a purely technical nature. Rare firms make significant improvements or change the strategy voluntarily; Most makes it if necessary, and this occurs mainly under pressure from the outside (that is, the external environment), and not from the inside.

The management of companies holding a competitive advantage is always in a somewhat disturbing state. It acutely feels the threat of the leading position of his company from the outside and takes a response. The influence of the situation in the country on the actions of the management of firms is an important issue that will be discussed in detail in subsequent chapters.

Competing in the global market

These basic principles of the competitive strategy exist, regardless of whether the company operates in the domestic or international market. But when analyzing the role of the country in the formation of a competitive advantage, the interests primarily represent those industries where competition is international in nature. It is necessary to understand how the firms achieve a competitive advantage through the action strategy in the international market and how it strengthens the advantages obtained in the domestic market.

Forms of international competition in different industries differ significantly. At one end of the spectrum of competition forms there is a form that can be called "multiple national" (MultiDOMESTIC). Competition in each country or a small group of countries, in fact, proceeds independently; The industry under consideration is available in many countries (for example, savings banks are in Korea, Italy and the USA), but in each of them competes in its own way. Reputation, client circle and bank capital in one country do not affect (or almost do not affect) to the success of its actions in other countries. MNK may be among competitors, but the effect of their competitive advantages in most cases is limited to the limits of the country in which these companies operate. Thus, the international industry is a set of industries (each - within its country). Hence the term - "multiple-national" competition. In the number of industries where competition traditionally has such a form includes many types of commerce, food production, wholesale, life insurance, savings banks, production of simple metal products and caustic chemicals.

At the opposite end of the spectrum - global industries in which the competitive position of the company in one country significantly affects its position in other countries. Here competition comes on a truly global basis, competing firms rely on the advantages arising from their activities around the world. Firms combine the advantages achieved in the country's country, with those they have achieved thanks to the presence in other countries, such as the scope effect, the ability to serve customers in many countries or reputation that can be approved in another country. Global competition takes place in industries such as the release of civilian aircraft, televisions, semiconductor devices, copiers, cars and clock. Globalization of the industries especially intensified after World War II.

With the extreme expression of the "multiple-national" industry on achieving a national advantage or competitiveness in the international market, it is not even worthwise. In almost every country there are such industries. Most (if not all) firms competing in these industries are local, since when competition in each country goes according to their rules, foreign firms achieve a competitive advantage very difficult. International trade in such industries has a modest scale, and there is no no. If the company belongs to a foreign company (which is rarely found), control by the foreign owner from his headquarters is very insignificant. Providing jobs in a foreign branch, the status of the "local corporate citizen" and the venue of the necessary research (within the country or abroad) is not his concern: the national branch controls all or almost all the activities necessary to ensure competitive status. In such industries, such as trade or manufacture of metal products, stormy debates about trade problems, as a rule, does not occur.

On the contrary, global industries are an isna struggle of firms from different countries where competition is conducted in ways that significantly affect the economic prosperity of countries. The ability of the country's firms to obtain a competitive advantage in global industries promises great benefits and in trade, and in foreign investment.

In global industries, the firms of the Volia-Neils have to compete in the international market to get or not miss a competitive advantage in the most important segments of the industry. True, in such industries may well be purely national segments, due to unique needs in such segments, the firm of only this country can flourish. But to navigate first of all on the domestic market, acting in the global industry, is a dangerous matter, regardless of which country is based on the country.

Achieving a competitive advantage using a global strategy

Global can be called a strategy in which the firm sells its products in many countries, while applying a single approach. In itself, the fact of transnationality does not mean automatically the availability of a global strategy; If MNA has branches operating independently and each in their own country, this is not a global strategy. So, many European MNCs, such as Brown Boveri (now Asea-Brown Boveri) and Phillips, and some American, for example, General Motors and ITT, always competed in this way, and meanwhile they weakened their competitive advantage, giving competitors the opportunity to get out of them.

With a global strategy, the company sells his goods in all countries (or, in any case, in most countries), which are an important market for its products. This creates an effect of a scale that reduces the severity of R & D costs and makes it possible to use advanced production technology. The main issue becomes the placement of different links of the value chain and ensuring her work so that it is possible to sell the goods from the company around the world.

In a global strategy, there are two clearly pronounced methods, with the help of which the firm can achieve a competitive advantage or compensate for various unprofitable moments due to conditions in the country. The first is the most profitable placement of various activities in different countries in order to best serve the global market. The second is the ability of a global firm to coordinate the activities of the branches scattered around the world. Placing the links of the value chain directly related to the buyer (marketing, distribution of goods and after-sales service) is usually tied to the placement of the buyer. So, to sell your goods in Japan, the company usually needs to have agents selling or distributors and provide after-sales service in place. In addition, the location of the buyer can also be attached to the placement of other activities due to high transportation costs or the need for close interaction with the buyer. So, in many industries, production, delivery and marketing should be carried out possible closer to the buyer. Most often, such a physical binding of activities to the client is required in all countries where the company has.

On the contrary, such activities as the production of products and ensuring the supply of raw materials, etc., as well as auxiliary activity (development or acquisition of technology, etc.) can be placed independently of the client's location - such activities can be performed anywhere. Within the framework of the Global Strategy, the company places such activities, guided by the benefits of a smaller amount of costs or differentiation on the world scale. It can, for example, build one big plant, designed for the global market, benefit from the scales effect. Essentially, very few activities are required only in the country of basing the company.

Solutions inherent in the global strategy can be divided into two essential areas:

1. Configuration. In which countries is every type of activity included in the value chain? For example, are Sony and Matsushita produced VCRs at one large plant in Japan or build additional factories in the United States and the UK?
2. Coordination. How is the dispersed activity (i.e., activities performed in different countries)? For example, are the same trading stamps and sales tactics or each branch use your trademark and tactics adapted to local conditions?

With multinational competition, INK has autonomous branches in each country and manage them approximately as well as the Bank managed by securities. With the global competition, the firm is trying to get a much greater competitive advantage of their presence in different countries, placing their activities with a global sight and clearly coordinate it.

Configuration of the global strategy

When planning its activities around the world, within the framework of this industry, the company faces the need to choose in two directions. First: to concentrate activities in one or two countries or dispersed it in many countries? Second: What kind of countries place one or another activities?

Focusing activities. In some industries, a competitive advantage is obtained by focusing in any one country and already finished products or details exporting abroad. This takes place in the following cases: when there is a big scale effect when performing a particular activity; When there is a sharp drop in production costs as the new product is being developed, which is beneficial to produce products at one factory; When it is advantageous to place interconnected activities in the same place, which will facilitate their coordination. Concentrated, or export-based, global strategy is typical for industries such as aircraft manufacturing, heavy engineering, production of structural materials or products for agriculture. As a rule, the activities of the company focuses in the country of basing.

The concentrated global strategy is especially characteristic of some countries. It is common in Korea and Italy. Today in these countries most of the goods are developed and produced within the country, and foreign countries account for only marketing. In Japan, this strategy follows the majority of industries in which the country has success in the international market, although now Japanese firms for different reasons quickly disenvate such activities as procurement of raw materials or assembly operations. The type of international competitive strategy, encouraged and developed in any country, determines the nature of industries in which this country successfully competes in the international market.

Distribution activities. In other industries, they receive a competitive advantage or neutralize unprofitable moments from the conditions in the country of basing by dispersing activities. Disposal requires direct foreign investment. It is preferable in industries in which high transportation costs, communication or storage are made by focusing unprofitable or it is risky for various reasons (political motives, an unfavorable exchange rate of currency exchange or danger of termination of deliveries).

Dispersal is preferably also where local needs in different products differ greatly. The resulting need to thoroughly adapt the products to local markets reduces the benefits of the effect of the scale or falling costs as the development arising when using one large plant or laboratory to develop new products. Another important cause of dispersal is a desire to improve marketing in a foreign country; Thus, the company emphasizes its commitment to the interests of customers and / or provides a faster and flexible response to a change in local situation. In addition, the dispersal of activities in many countries also gives the firm with valuable experience and professionalism, obtained through the analysis of information from different points of the world (how much, while the firm should be able to coordinate the activities of its branches).

In some industries, the state can very effectively encourage the firm to elect the dispersal strategy through tariffs, non-tariff barriers, procurement on the national principle. Very often, the government wants the firm to place the entire value chain in his country (they say, it will give the country an additional benefit). Finally, the dispersal of one activities sometimes benefits from the concentration of others. Thus, carrying out the final assembly in their own country, you can "feel" your government and get a more free import of components from large-scale centralized plants for the production of components located abroad.

Ultimately, the choice between concentration and dispersonation depends on the type of activity performed. In the production of trucks, leaders such as Daimler-Benz, Volvo and Saab-Scania, most of the R & D fulfill "at home", and the assembly is produced in other countries. The best options for concentration-dispersal in different industries are different, they can be different even in different segments of the same industry.

Here is an illustration of the above reasoning. Swedish firms in a number of industries related to the mining industry use strong dispersal strategy, as customers in this industry appreciate close cooperation from equipment providers providing maintenance and technical assistance. In addition, the mining industry is almost everywhere state or is under the strong influence of the public sector. Therefore, on political reasons, the company needs to have branches abroad, since the governments of other countries prefer to have a supplier of equipment in the country, and not import equipment. Swedish firms, such as SKF (ball bearings) or Electrolux (electrical appliances), tend to apply strong dispersal strategy with large direct foreign investments and, essentially autonomous branches; This is the result of the existing need for needs in certain goods between countries, the need for close interaction with clients during marketing and maintenance, as well as pressure from the government of countries where the firm is valid. Swiss firms also have a tendency to dispersal activities in many industries, including trade, drugs, food and dyes.

The global strategy of dispersal with major foreign investments is also characteristic of industries such as the production of packaged consumer goods, medical care, telecommunications and many services.

Placing activities. In addition to choosing places where one or another type of activity will be carried out, it is also necessary to choose a country (or country) for this. Usually all activities are first concentrated in the country of basing. However, under the global strategy, the company can perform assembly operations, manufacture nodes and details or even produce R & D in any country at its discretion - where it is most profitable.

Advantages of placement often show themselves in strictly defined activities. One of the major advantages that the Global Firm has the ability to distribute different activities between countries depending on where it is preferable to produce one or another. Thus, it is possible, for example, to produce components of computers in Taiwan, write programs in India, and maintain the main R & D in the Silicon Valley in California.

The classical reason for the placement of a particular activity in a particular country is the smaller cost of production factors. Thus, assembly operations are made in Taiwan or Singapore to win on applying well-trained, interested, but cheap labor. Capital accumulates wherever possible, on the most favorable terms. Thus, the Japanese company NEC for the necessary expansion of production facilities for the release of semiconductor devices financed the convertible debt is not in Japan, where such practice is not common, but in Europe. It should be noted that global competition causes amplifying dispersal activities based on such considerations. Many American firms translate production to the Far East (so, there are almost all disk drives of American firms), and Japanese manufacturers of sewing machines, sports goods, radio components and some other goods are actively investing in Korea, Hong Kong, in Taiwan, and now in Thailand, placing production there.

Recently, there has been a tendency to translate activities abroad not only for use there benefits from production costs, but also for R & D, gain access to specialized skills available in these countries, or development of relationships with key clients.

Thus, German firms producing equipment for the manufacture of plastics, and Swiss firms that produce geodesic equipment placed in the US project bureaus to develop electronic control units. SKF (Sweden), the global leader in the release of ball bearings, now has a production and design base in the immediate vicinity of many German factories - leaders in various industries and from the automotive industry, on a large scale of consuming ball bearings.

Firms place their activities abroad and in the event that this is a necessary condition for their business operations in the respective countries. In some industries, the implementation of the company in this country for assembly, marketing or service is very important for the sale of its products and services to consumers in this country. A good example is the production of industrial air conditioners using high technology: industry leaders (American firms, such as Carrier and Trane) operate in many countries in order to best adapt products to local conditions and fulfill high maintenance requirements.

Government directives also affect the placement of activities. Thus, many Japanese investments in the United States and Europe (in such industries as the production of cars and spare parts for them, consumer electronics, etc.) are caused by applicable or possible restrictions on imports to Japan. Similarly, many Swedish, Swiss and American firms before World War II moved activities abroad, because then trade restrictions were more important and transportation costs were higher (that is why their activities are often more dispersed than Japanese or German firms in that The industry). Once a dispersed firm is difficult to collect under a single control, since the managers of branches in different countries are trying to preserve the power and autonomy of their branches. The resulting inability of the firm to switch to more focused and agreed strategies necessary to obtain a competitive advantage is one of the reasons for the loss of the latter in some industries.

However, this is not all reasoning about the best placement of a particular activity. In the end, the choice of the best place to accommodate the country's maintenance of the company (first of all, the development of the strategy, R & D and the most complex production processes) is one of the main issues discussed in this book. It is enough to say that the motives for choosing countries to fulfill this or that activity are not limited to the classical explanations here.

Global coordination

Another important means of achieving a competitive advantage through the global strategy is the coordination of the company's activities in different countries. Coordination (coordination) includes the exchange of information, the distribution of responsibility and coordination of the efforts of the company. It can give some advantages; One of them is the accumulation of knowledge and experience gained in different places. If the firm learns to better organize production in Germany, the transfer of this experience can be useful at the factories of this company in the United States and Japan. Conditions in different countries are always different, and this gives the basis for comparison and the possibility of assessing the knowledge gained in different countries.

Data from different countries give information not only about the product or technology of its production, but also about customer requests and marketing methods. By coordinating the marketing activities of all its divisions, the firm with a truly global strategy can pre-obtain a warning about the expected changes in the structure of the industry, see dotted designated trends in the industry before they become apparent to everyone. Coordination of activities in its dispersal can give an effect of the scale due to the division of the task for certain tasks to branches that determine their specialization. For example, the company SKF (Sweden) on each of its foreign factories produces different sets of ball bearings and, organizing mutual supply between countries, provides in each of them the availability of the whole range of products.

Distribution of activities, if coordinated, can allow the firm to quickly respond to changes in currency exchange rates or the cost of factors. Thus, the gradual increase in production volumes in the country with a favorable exchange rate can reduce total costs; This tactic was used in the late 1980s, Japanese firms in a number of industries, since the Japanese yen rate was then high.

In addition, coordination can strengthen the differentiation of the company's products, whose clients are mobile or are multinational buyers. The sequence in placing the production of a particular product and in the approach to doing business on a worldwide strengthens the reputation of the brand. The ability to serve multinational or mobile customers where it is convenient for them, it is often greater. Coordination of branches in different countries can facilitate the impact on the governments of these countries, if the firm has the opportunity to expand or turn the activity in one country at the expense of others.

Finally, the coordination of activities in different countries allows you to flexibly respond to the actions of competitors. The global firm can choose where and how to fight with a competitor. She may, for example, give him a decisive battle where he has the largest production volume or a flow of funds, and thereby reduce the rival resources necessary for competition in other countries. IBM and Caterpillar used this defensive tactic, acting in Japan. The firm focus only on the domestic market has no such flexibility.

The needs of buyers and local conditions differing from the country to the country make it difficult to coordinate activities in different countries, making experience accumulated in one country, not applicable in others. In such conditions, the industry becomes multinational.

However, although coordination gives significant advantages, achieving it when carrying out a global strategy - the task is quite difficult in the organizational plan due to its scales, language barriers, the difference in the culture and the need to exchange open and reliable high-level information. Another serious difficulty is to coordinate the interests of managers of branches of the firm with the interests of the company as a whole. For example, a branch of the company in Germany does not want to inform the branch in the United States about his latest achievements in the field of technology from concerns that the American branch, which is good, will bypass it with the annual summary. In other words, branches of the firm in different countries often see each other not allies, but competitors. Such annoying organizational problems lead to the fact that complete coordination in global firms is rather an exception than the rule.

Benefits by placement and thanks to the structure of the company

The competitive advantage of the global firm is useful to divide into two types: arising from the placement of activities (in which country is placed) and independent of the placement (based on the system of activity of the company around the world). The advantages based on the placement of activities in a particular country occur either from the country of basing the company, or from other countries in which the company is valid. The global firm tries to use the advantages received in the country of basing, to penetrate foreign markets, and can also use the advantages obtained from the implementation of certain activities abroad, to enhance the advantages or compensation of unprofitable moments in the country of basing.

The advantages based on the structure of the company, result from the total trading of the company, the speed of development of goods at all factories of the company around the world and the ability of the firm to coordinate the activities of the "House" and abroad. The effect of scale in production or R & D itself is not attached to the country - a large plant or research center can be located anywhere.

For the start of global competition, it is necessary that any firms achieve in their countries the advantages allowing them to enter foreign markets. The competitive advantage achieved exclusively in the country's basic country is quite enough in order for global competition. However, over time, successfully existing global firms begin to combine the benefits achieved by "houses", with advantages of placing certain activities in other countries and from the system of activity of the company around the world. These additional benefits in combination with the achieved "houses" make the last more persistent, and at the same time they compensate for the unique moments of the situation in the country of basing. Thus, the benefits of different sources are mutually enhanced. The overall effect of scale due to the placement worldwide allowed, for example, the German firms of Zeiss (Optics) and Schott (glass) allocate more funds to R & D and more fully use the advantages of technology and demand in the country of basing.

Practice shows that firms that do not use and do not develop the benefits of the country of basing through the global strategy, vulnerable to competitors. It is the combination of advantages of the conditions in the country of basing, from the placement of certain activities abroad and from the system of global activity of the company, and not everyone separately creates international success.

Now that the globalization of competition has become a generally accepted fact, the focus on the structure of the company and the placement of activities in other countries. In fact, the advantages of the conditions in the country's country are usually more important than others (we will also be returned to this topic in subsequent chapters).

Choosing a global strategy

There is no single type of global strategy. There are many ways to compete, and each requires a choice where to place activities and how to coordinate it. Each industry has its optimal combination. Most global strategies are an inextricable combination of trade and direct foreign investment. Finished products are exported from countries that import components, and vice versa. Foreign investments reflect the placement of industrial and marketing activities. Trade and foreign investment are more likely complemented by each other than replace.

The degree of globalization in different segments of the industry often differs, and the optimal global strategy is also different, respectively. For example, in the production of lubricating oils there are two well-pronounced strategies. In the production of automotive engine oils, competition has a multinational character, that is, in each country is carried out separately. The nature of the road, climatic conditions and local legislation are different everywhere. During production, different brands of main oils and additives are mixed. The effect of scale is small here, and transportation costs are high. Distribution and sales channels that are very important to achieve success in competition, vary greatly from country to country. In most countries, leaders are firms working on the domestic market (for example Quaker State and Pennzoil in the USA) or MNA with autonomous branches (for example, Castrol in the UK). In the manufacture of oils for ship engines, everything is different: here is a global strategy; The ships are freely moving from the country to the country, and it is necessary that in each port in which they come in, oil of the desired brand. Therefore, the brand's reputation has become global, and successfully existing firms producing oils for ship engines (Shell, Exxon, British Petroleum, etc.), global firms.

Another example is a hotel industry: Competition in many segments is a multinational character, since most of the links of the value chain are tied to the client's location, and the difference in needs and conditions between countries reduces the benefits of coordination of activities. However, if we consider the highest class hotels or calculated primarily on businessmen, then competing here is more global. Worldwide competitors such as Hilton, Marriott or Sheraton have property dispersed worldwide, but use a single brand, a single design, a single service standard and a room booking system from anywhere in the world, which gives them advantages when serving businessmen, constantly traveling around the world.

When the production process is broken down at the stage, different degrees and nature of globalization are also often observed. Thus, in the production of aluminum initial stages (enrichment and metal smelting) are global industries. Further stage (production of semi-finished products, such as castings or stamping from aluminum) - already a number of industries with multinational competition. The need for various goods is changing from the country to country, transportation costs are high, customer service requirements in place - too. The effect of scale in the entire value chain is extremely modest. In general, the production of raw materials and components, as a rule, is more globally than the production of finished products.

The differences in the types of globalization of different segments of the industry, the stages of the production process and groups of countries create the possibility of drawing up focused global strategies aimed at a certain segment of the industry on a global scale. So, Daimler-Benz and BMW, choosing such a strategy, focused on top and business class machines with high technical indicators, and Japanese companies Toyota, Isuzu, Hino and others - on light trucks.

The firm conducted by a focused global strategy focuses on a segment of the industry, undeservedly forgotten companies with a broad specialization. Global competition can produce completely new segments of the industry, because the firm acting in any sector of its industry around the world, on this basis can get an effect of scale. The reasons for such a strategy may be different. For example, to work in this segment of the industry only in one country is unprofitable due to large costs. In some industries, this is the only true strategy, since the benefits of globalization are achievable only in one segment (for example, expensive hotel for businessmen).

Global focus can be the first step towards the global strategy of a wider profile. The company enters global competition in this segment when there are unique advantages in the country. For example, in such sectors as the production of cars, forklift trucks and televisions, Japanese firms initially seized the "bridgeheads", focusing on the market sector left without attention - the most compact products of each of these industries. Then they expanded the range of products and won world leadership in their industries.

Competed globally can and relatively small firms, and not just large. At small and medium-sized companies, there is a solid proportion of international trade, especially in countries such as Germany, Italy and Switzerland. Often they focus on the narrow segments of the industry or operate in relatively small-scale industries. The focused global strategy is also characteristic of mines from small countries, such as Finland or Switzerland, and for small and medium-sized firms from all countries. Thus, Montblanc (Germany) holds such a policy in the production of expensive written devices, and most Italian firms producing shoes, clothing and furniture are also competing around the world in the narrow segment of their industries.

Small and medium-sized firms have a tendency to build their strategy mainly on exports - direct overseas investment has a modest scale. Nevertheless, the number of MNG is growing. For example, in Denmark, Switzerland and Germany a lot of comparatively modest on the scale of MNA focused on certain segments of their industries. Having limited resources, small firms experience difficulties with access to overseas markets, the definition of needs in these markets and the provision of after-sales service. In different industries, these problems are solved in different ways. One way is to sell goods through sales agents or their importers (characteristic of Italian firms), the other is to act through distributers or trade firms (characteristic of Japanese and Korean firms). Another way is to use industrial associations to create a common sales infrastructure, to organize exhibitions and sales fairs and engage in market research. So, without cooperatives, the success of agricultural industries in Denmark would be impossible. Recently, small firms enclose alliances with foreign firms to be able to compete globally.

The process of globalization of the industry

The globalization of industries is because changing technology, customer requests, state policy or infrastructure within the country makes it possible to firms from some countries to "go away" from competitors from other countries or increases the importance of advantages arising from the global strategy. Thus, in the automotive industry, globalization began when Japanese firms have achieved a significant competitive advantage due to quality and performance, the needs of cars in different countries have become more similar (to a large extent due to the rise in price of fuel in the United States), and international transportation costs fell ( And these are just some of the reasons).

The strategic innovation itself often opens up opportunities for industry globalization. International leadership in the industry is often the result of the fact that the firm opens a way to make a global strategy viable. For example, it can find a way to cheaper to fit the goods developed and manufactured in one place to the conditions of different countries (let's say, modifying the standard product for another voltage in the local power grid). Thus, in the production of selector communication systems, computer and other systems used in telecommunications, Northern Telecom, NEC and Ericsson won due to the design of the manufactured equipment, which allows using the modular software and requires only minor alterations to align with the local telephone network. In addition, the firm can develop a new product that uses universal popularity, or marketing method that provides this product popularity. Finally, it is possible to find innovative solutions that eliminate obstacles to the global strategy. For example, American firms not only were the first to produce plastic disposable syringes, immediately winning wide popularity, but also reduced transportation costs compared to glass syringes and obtained the effect of scale, releasing products at one global factory.

The emerging leaders in global industries are always starting with any advantage achieved by the "House", whether it is a more promising design, a higher quality of manufacture, a new marketing method or a gain in factor costs. But as a rule, to preserve the benefits, the company must go further: the achieved "house" the advantage should be an instrument to enter the overseas market. And once he focused there, successfully existing firms complement the initial advantages with new ones - based on the effect of the scale or reputation of the brand obtained by actions around the world. Over time, the competitive advantage is enhanced (or non-showing moments are compensated) by placing certain types of activities abroad.

Although the benefits achieved in the country of basing, and it is difficult to keep the global strategy can complement and strengthen them. Good example - consumer electronics. Matsushita, Sanyo, Sharp and other Japanese firms initially made focus on low cost, releasing simple portable TVs. Going to the overseas market, they got the effect of scale and further reduced costs, reducing the costs when mastering new models. Thanks to trade around the world, they were then able to very actively invest in marketing, new equipment and R & D, to own technology. Japanese firms have long moved away from the concentration strategy at costs and now produce a wide range of increasingly differentiated TVs, video recorders, etc., using the materials and technology of the highest quality. A strategy of concentration on costs was taken today by their Korean competitors - Samsung, Gold Star, etc. - and produce simpler, standard models, using cheap workforce.

The cost of factors is the advantage of low order and besides very non-permanent both for a company competing in the domestic market and for competing international. It can be seen by such sectors as tailoring or construction. Translating activity abroad, a firm with a global strategy can neutralize changes in the cost of factors, harmful to the interests of its country, or even use them. Thus, the Swedish firms producing heavy trucks (Volvo and Saab-Scania) have long been transferred part of the production to countries such as Brazil and Argentina. In addition, the firm, the only advantage of which is the winnings of factors, rarely become new leaders in the industry. Imitation strategy The leaders are too easy to make ineffective by transferring to offshore production or offshore provision. Facility with low factor costs will be able to enter the leaders only if they combine this advantage with focusing on any segment of the industry, ignored or not occupied by leaders, and / or with capital investment in large plants equipped with the most modern technology at the moment. And they will be able to keep their advantage, only globally competing and constantly strengthening this advantage. The influence of conditions in the country on the initial advantage of firms, the ability of the latter to develop these advantages across the global strategy, the ability and will of firms over time to achieve new advantages - the main topic of subsequent chapters.

Ahead of others in a global strategy

Immediate reaction to any change in the structure of the industry has no less important in global competition than with competition in the domestic market, if not even greater. Ultimately, leaders in many global industries become those firms that are the first to recognize a new strategy and apply it globally. Thus, the company Boeing was the first to apply a global strategy in the production of aircraft, Honda - motorcycle, IBM computers, and Kodak - film films. American and English firms producing a variety of packaged consumer goods maintain leadership to a large extent due to the fact that the first global strategy applied.

Global competition enhances the benefits of a quick response to change. "Early Ptkashka" first spread their activities around the world; This additional advantage, in turn, leads to advantages in reputation, scale and speed of product development. And the positions conquered on the basis of such advantages can be held for decades and even longer. So, in the production of tobacco products, whiskey and high-quality porcelain, English firms are leading for more than a century, despite the decline in the British economy as a whole. Such examples of long leadership can be found in Germany (printing machines, chemicals), USA (non-alcoholic beverages, movies, computers) and almost all other developed countries.

The reasons for changing the positions of countries in the competitive race are the same as in more general cases discussed above. Recognized international leaders pass positions, if they do not respond to changes in the structure of the industry, giving other firms the opportunity to bypass them due to the rapid transition to new technologies or goods. Thus, the effect of scale, reputation and communication with the sales channels of established leaders are lost. Thus, the traditional leaders of some industries gave way to Japanese firms in those sectors that were strongly changed by the advent of electronics (for example, production of machines and tools) or where mass production came to replace the traditional small-sector (release of cameras, forklift trucks, etc.). Existing leaders will also defeat if other firms discover new market segments that were ignored by leaders. Thus, Italian firms producing electrical equipment saw the opportunity to produce compact, unified models using mass production, and selling them just to the commercial networks so that they implemented them under their brand. Actively developing this rapidly growing new segment, Italian manufacturers of electrical appliances reached European leaders. FIRMS, the first to use the changes in the structure of the industry, often become new leaders, as they benefit from the next change in the structure of the industry. The country's country significantly affects the ability of firms to respond to these changes, and, as previously said, the global leaders in the industry are often the firms of one or two countries.

The ability of firms to retain the advantages mined on the basis of the previous strategy is often the result of a simple luck, namely the fact that the industry does not occur in the industry. Still, it is more often the result of a constant update in order to adapt to changing conditions. In further chapters, the country characteristics explaining this adaptability are studied in detail. Forces that allow the country's firms to preserve one day the competitive advantage is the main support of the country's prosperity.

Alliances and Global Strategy

Strategic alliances that can also be called coalitions are an important means of carrying out global strategies. These are long-term agreements between firms, which go on the usual trading operations, but not brought to the merger of firms. Under the term "Alliance" means a number of types of cooperation, including joint ventures, sales of licenses, long-term supply agreements and other types of interfirm-in-law24. They are found in many industries, but especially often - in the automotive industry, aircraft manufacturing, the production of aircraft engines, industrial robots, consumer electronics, semiconductor devices and drugs.

International alliances (companies in one industry based in different countries) are one of the means of global competition. With the alliance, there is a division between partners in the value chain, worldwide. Alliances are applied for quite some time, but they changed them with time. Earlier, the firms from developed countries concluded alliances with firms from less developed countries for marketing (often such maneuver needed to gain access to the market). Now the alliances make more and more firms from highly developed countries to act together in large regions or around the world. In addition, alliances now conclude not only for marketing, but also for other activities. So, all American automotive companies have alliances with Japanese (and in some cases with Korean) firms for the production of cars sold in the United States.

Companies enter alliances for the sake of benefits. One of them is the effect of scale or reduction of time and costs for the development of products achieved by joint efforts in marketing, the production of components or assembly of certain models of finished products. Another advantage - access to local markets, necessary technologies or meeting the requirements of the Government of the country, in which the company has, that the company acting on the territory of the country belonged to this country. For example, the Alliance of General Motors Corporation with Toyota - Nummi - was conceived by General Motors in order to take over to Toyota production experience. Another advantage of alliances is a risk section. Thus, some pharmaceutical companies have concluded mutual licensing agreements in the development of new drugs to reduce the risk that research in each individual company will be unsuccessful. Finally, firms with complex and advanced technologies are often resorted to alliances to influence the nature of competition in the industry (for example, by selling licenses to technology with extensive demand to achieve standardization). Alliances can compensate for the unremarkable moments in competition, whether it is high cost of production factors or outdated technology, and the independence of companies remains and the need for expensive merger is preserved.

However, alliances are expensive in terms of strategic and organizational. At least for the beginning of very real problems of coordination of the activities of independent partners who have significantly different and even contradictive goals. The difficulties of the coordination order are threatened to obtain benefits from the global strategy. In addition, today's partners may well be competitors tomorrow; This is especially true of partners with a more persistent or more rapidly developing competitive advantage. Japanese firms confirmed this thought many times. In total, the partner gets part of the company's profits, sometimes very solid. Alliances - the thing is continuous and can freeze or crash. It often begins everything perfectly, but soon the alliance decays or ends with merging companies.

Alliances are often temporary measure, they are distributed in industries that occur structural changes or competition is tightened, and managers firms fear that they will not cope alone. Alliances are the result of the uncertainty of firms in their forces and most often found from the firms of the second echelon, trying to catch up with the leaders; At first, they give to weak competitors hope to preserve independence, but ultimately the case may well reach the sale of a company or merging it on the other.

As can be seen from the above, the Alliance is not a panacea. And in order to maintain a place in a competitive race and go ahead, the firm must develop domestic reserves in the areas most important to achieve competitive advantage. As a result, world leaders are rarely relying on partners (if they even rely) when they need funds and skills necessary to obtain a competitive advantage in their industry.

The most successful alliances are very specific. Alliances concluded by the world leaders such as IBM, Novo Industry (firm, insulin) and Canon have a narrow orientation, their goal is to enter certain markets or access to certain technologies. Alliances in general - a means of enhancing a competitive advantage, but they are rarely an effective means of creating it.

The impact of national conditions for success in competition

The principles outlined above the principles of the competitive strategy show how much it is necessary to take into account, highlighting the role of the country of basing in international competition. Different strategies are more suitable for various industries, as the structure of industries and sources of competitive advantage in them are not the same. Yes, and in the same industry, the firm can choose different strategies (and successfully apply them) if they strive for various types of competitive advantage or aimed at different segments of the industry.

The country succeeds when conditions in the country are conducive to the best strategy for any industry or its segment. A strategy that works well in this country should lead to a competitive advantage. Many of the country's characteristics facilitate or, on the contrary, make it difficult to carry out a strategy. Features These are heterogeneous - from behavioral norms that determine the methods of managing firms, to the presence or absence of certain types of qualified labor in the country, the nature of demand in the domestic market and the goals that local investors set themselves.

To obtain a competitive advantage in complex industries, improvements and innovations are required - search for new, best ways to competition and the use of these methods everywhere, as well as continuous improvement of goods and technologies. The country is successful in these industries if the conditions in it favors such activities. To achieve advantages, you need an anticipation of new ways to compete and readiness to risk (and invest in risky enterprises). And the success of those countries, the conditions in which give firms a unique opportunity to recognize new competitive strategies and incentives to immediately apply these strategies. The same countries whose firms are properly reacting to changes in the situation or do not have the necessary abilities, turn out to be losing.

Preserving a competitive advantage for a long period requires the improvement of its sources. Improving the benefits requires, in turn, more complex technologies, skills and production methods and permanent investments. Countries are successful in those sectors where there are skills and resources necessary to change the strategy. The firms that are revealed on the laurels, using times and forever the fixed concept of a competitive advantage, quickly lose their positions, as competitors copy the techniques that once allowed these firms to escape forward.

The constant changes needed to hold a competitive advantage - the thing is uncomfortable and difficult in organizational terms. Countries are successful in those sectors in which firms have pressure that helps them overcome inertia and engage in continuous improvement and updates, and not sit back. And in those sectors where firms cease to improve, the country loses.

The country has success in those sectors where its advantages as a national base have weight in other countries and where improvements and innovations are preceding international needs. In order to achieve international success, firms must transform leadership in the domestic market in international leadership. This allows you to strengthen the benefits obtained by "houses" using a global strategy. Countries are successful in those sectors where domestic firms compete globally, encouraged by the government or under pressure from circumstances. In the search for determinants of the competitive advantage of countries in different industries, it is necessary to determine the conditions in the country, conducive to success in competition.

Honestly, competitive advantages - This is the topic to which I have a two-way attitude. On the one hand, to rebuild the company from competitors on the market is a very interesting task. Especially when the company, at first glance,, like everything, and nothing is allocated. In this matter, I have a principle position. I am convinced that you can rebuild any business, even if it is one of the thousand and trades at prices, above the average market.

Types of competitive advantages

Conditionally, all competitive advantages of any organization can be divided into two large groups.

1. Natural (price, deadlines, delivery terms, authority, customers, etc.)
2. Artificial (personal approach, guarantees, stocks, etc.)

Natural benefits have more weight, because they are actual information. Artificial advantages are more manipulation that, with competent use, can significantly amplify the first group. We will back to both groups even lower.

And now the most interesting. Even if the company considers himself the same as everything is inferior to competitors at prices and believes that it does not stand out, it still has natural advantages, plus, it is possible to make artificial. You just need to spend some time to find them and correctly formulate. And here everything begins with competitive analysis.

Competitive analysis that is not

Do you know what is the most amazing in RuNet? 80-90% of businesses do not conduct competitive analysis and does not allocate the benefits of the company according to its result. Everything, but that enough forces and time in most cases is to look at competitors and drive some elements from them. That's all the detuning. And it is here, as on yeast, we grow cliche. What do you think, who invented the phrase "Young and dynamically developing company"? It does not matter. Many have taken and ... quietly adopted. Under the shum Similarly, the cliché appeared:

• Individual approach
• Highly qualified professionalism
• High quality
• First-class service
• Competitive prices

And many others who are not competitive advantages in fact. If only because no company in the right mind says that it employs amateurs, and the quality is slightly worse than any.

I am generally surprised by the attitude of some businessmen. They communicate with them - they all "somehow" work, orders "somehow" go, there is profit - and okay. Why do something invent, describe and count? But as soon as things begin to go tight, then everyone recalls marketing, detuning from competitors and the benefits of the company. It is noteworthy that no one considers money that was misunderstood due to such a frivolous approach. But this is also a profit. Could be ...

In 80-90% of cases, business Runet does not conduct a competitive analysis and does not show the benefits of the company to its customers.

Nevertheless, all this has a positive moment. When no one shows its advantages, it is easier to restrict. So it is easier to attract new customers who are looking for and compare.

Competitive advantages of products (Products)

There is another rough mistake that many enterprises allow with the wording of advantages. But it costs to immediately make a reservation that this does not apply to monopolists. The essence of the error is that the customer shows the advantages of goods or services, but not the company. In practice, it looks like this.

That is why it is very important to properly arrange accents and withdraw the benefits and emotions to the forefront, which receives and experiences a person when working with the organization, and not from buying the product itself. I repeat, this does not apply to monopolists who produce a product that is inextricably connected with them.

Basic competitive advantages: Natural and artificial

It's time to return to the varieties of advantages. As I said, they can be divided into two large groups. Here they are.

Group №1: Natural (actual) benefits

Representatives of this group exist on themselves as a fact. Only many of them do not write. Some thinking that it is obvious, others - because they are hiding behind corporate cliches. The group includes:

Price - One of the strongest competitive advantages (especially when there is no others). If your prices are lower than the competitors - write as far as. Those. Not "low prices", but "prices, 20% lower than market." Or "Wholesale prices in retail." Figures play a key role, especially when you work in a corporate segment (B2B).

Terms (time). If you deliver the goods from today, on-today - tell me about it. If you deliver to remote regions of the country for 2-3 days - tell me about it. Very often the issue of delivery time is very acute, and if you have a thoroughly logistics, then write specifically where and for how much you can deliver the goods. Again, avoid abstract cliché a la "fast / operational delivery".

Experience. If your employees "Dog ate" on what you sell, and know all the bottomable of your business - write about it. Buyers love to work with professionals who can consult. In addition, buying a product or service from an experienced seller, customers feel more protected, which brings them to buying them from you.

Special conditions. If you have any special delivery terms (delaying payment, post-payment, discounts, availability of showroom, geographic location, wide warehouse program or range, etc.). All that is not from competitors - will fit.

Authority. Certificates, diplomas, diplomas, large customers or suppliers, participation in exhibitions and other evidence that increase the significance of your company. Great help - the status of a recognized expert. This is when the company's employees perform at conferences, have a promoted channel on YouTube or an interview in profile media.

Narrow specialization. Imagine that you have a Mercedes car. And in front of you two workshops: a specialized service that is engaged only by "Mercemi" and multidisciplinary, which is rotating everything: from UAZ to tractors. What service do you contact? I bet, in the first, even if there are prices above it. This is one of the varieties of a unique trading offer (UTP) - see below.

Other actual advantages. For example, you can have an assortment wider than competitors. Or a special technology that others do not have (or which everyone has, but they do not write competitors). Here can be anything. The main thing is that you have something that is not from others. As a fact. This is also your ITP.

Group number 2: Artificial advantages

I especially love this group, because it helps a healthy in situations when the customer's company does not have any advantages. This is especially true in the following cases:

1. A young company, only goes to the market, has neither customers, no cases, no reviews. As an option - specialists leave the larger company and organize their own.
2. The company takes place in the niche somewhere in the middle: it does not have a wide range, like large retail chains, and there is no narrow specialization. Those. Sales products like everyone else at prices are slightly above the average market.
3. The company has detuning, but the same as the competitors. Those. All in the niche use the same actual advantages: discounts, experience, etc.

In all three cases, the introduction of artificial advantages is helped. These include:

Expose value. For example, you sell laptops. But you can't compete at a price with a larger seller. Then you go to the trick: you install the operating system and the basic set of programs on the laptop, selling it just more expensive. In other words, you create an extension value. This also includes various actions of A la "buy and win ...", "When buying an apartment - a T-shirt as a gift", etc.

Personal detuning. Cool works when everyone around is hiding behind corporate cliches. Its essence is that you are showing the company's face (for example, director) and cycling. It works perfectly practically in any niche: from the sale of children's toys to armored doors.

A responsibility. A very strong advantage that I actively use on the site of my laboratory. Perfectly combined with the previous paragraph. People love to work with those who are not afraid to take responsibility for goods and / or services that sell.

Reviews. Provided that they are real. The authoritative man who gives you a review, the stronger the impact on the audience (see trigger "). Reviews on the brand name with printing and signature work better.

Demonstration. The best presentation is a demonstration. Suppose you have no other advantages. Or there is, but implicit. Make a visual presentation of what you sell. If these are services - show how you provide them, remove the video. At the same time, it is important to properly arrange accents. For example, if you check every product for performance, tell us about it. And it will be the advantage of your company.

Cases. This is a kind of visual demonstration of solved tasks (completed projects). I always recommend that they describe them because they work perfectly for sale. But there are situations when there are no cases. This is especially true for young companies. Then you can make the so-called artificial case. The essence is simple: Drive your service yourself or the hypothetical client. As an option, the present client is on the client (depending on the kind of services, if possible). So you will have a case that can show and demonstrate your expertise.

Unique selling proposition. We have already spoken about him a little higher. Its essence is that you enter some detail or disclose information that takes away you from competitors. Here to take at least me. I provide copywriting services. But copyrighting services in a wide range are provided by many experts. And my ITP is that I give a guarantee of the result expressed in numbers. Those. I work with numbers as an objective performance indicator. And it clings. More about the ITP you can learn in.

How to find and correctly describe the benefits of the company

As I said, I firmly convince that each company has its own advantages (and disadvantages, but it does not matter now :)). Even if she is a strong middling and sells everything like everyone else. And even if it seems to you that your company does not stand out for anything special, the easiest way to understand the situation is to ask directly customers who are already working with you. At the same time, be prepared that the answers can surprise you.

The easiest way to figure out the strengths of your company is to ask customers why they stopped their choice for you.

Someone will say that it works with you because you are closer (in geographical plan). Someone will say that you are confidence, and someone you just liked. Collect and analyze this information, and it will increase your profits.

But that's not all. Take a sheet of paper and write down the strengths and weaknesses of your company. Objectively. As in spirit. In other words, the fact that you have and what you do not have (or not yet). At the same time, try to avoid abstractions by replacing them for specifics. See examples.

Not about all the advantages can be written on the same site. However, at this stage, the task of writing as much as possible the strengths and weaknesses of the enterprise. This is an important starting point.

Take the handle, paper. Divide the sheet into two columns and write out in one advantage, in the second - the flaws of the company. You can under a cup of coffee. Do not look at Ryabin, she's here so for entourage.

Yes, we have, but it is

Check out examples:

Disadvantage	Transformation in advantage
Office on the outskirts	Yes, but the office and the warehouse in one place. You can immediately see the goods. Free parking even for trucks.
The price is higher than that of competitors	Yes, but rich complete set: computer + operating system installed + set of basic programs + gift.
Long delivery under the order	Yes, but there are not only typical components, but also rare parts by individual orders.
Young and inexperienced company	Yes, but there is mobility, high efficiency, flexibility and lack of bureaucratic wires (these moments need to be disclosed to the subject).
Small range	Yes, but there is a specialization on the brand. Deep cognition in it. Ability to advise better than competitors.

The idea you understood. So you have several types of competitive advantages at once:

1. Natural (actual information that you have, and which takes away you from competitors)
2. Artificial (amplifiers who also remove you from competitors - guarantees, personal approach, etc.)
3. "Perevils" are disadvantages that are turned into advantages. They complement the first two points.

Little cunning

I use this trick from time to time when there is no way to show advantages to the full, as well as in a number of other cases, when something more "sweaty" is needed. Then I do not just write the advantages of the company, but uniting them with the benefits that the client receives from the product or service. It turns out a sort of "rat mixture".

See how it looks in practice.

• It was: Experience 10 years
• It became: Budget savings up to 80% due to the development of 10 years of experience

Or another example.

• It was: Low prices
• It became: The price is lower by 15%, plus the reduction of transport costs by 10% at the expense of its own fleet.

About how to create benefits correctly, you can learn in detail from.

Summary

Today we reviewed the types of the main competitive advantages of the company and the examples disassembled how to correctly formulate. It is important to understand that all that we did today should be the default to enter a competitive strategy (if it is being developed). In other words, everything will work better when linked to a single system.

I very much hope that the information in this article will expand your capabilities and will allow you to more effectively carry out competitive analysis. In turn, if you have any questions - ask them in the comments.

I'm sure you will succeed!