"Competitive advantage" is a concept founded by Michael Porter in 1985. He created a framework in order to gain competitive advantage and organization to become unique form their competitors (Armstrong, M.2006).
A competitive advantage exists when an organization is able to give the same benefits as its competitors at a lower cost, or give benefits more than its competitors differently. Therefore, a competitive advantage enables the organization to create additional value than its competitors (Quick MBA, official Web page).
According to Michal Porter, there are two basic types of competitive advantages;
1.cost advantage
2.differenciate advantage
An organization will have competitive advantage when they can reduce cost and differentiate their products / services than its competitors. Let us take an example from Sr Lankan Banking Industry.
-Hatton National Bank has a long history since 1988.
-Having more than Rs 1.2 Billion Asset base.
-Island wide network. The bank has 252 branches all over the country with more than 780 ATMs.
-Customized products and Service.
- Different products and services which can fulfill customer expectations.
-Advanced technology.
-Low cost fund base comparing to advances. (Deposits vs lending products)
-Sustainability and CSR.
Above - mentioned reasons create a competitive advantage for Hatton National Bank among other banks and financial institutions in the Industry.
-A long history in Gem mining , cutting, trading and jewelry manufacturing.
-Sustainable Gem mining methods.
-A highly skilled Gem cutting tradition.
-Availability of Gemstones and untapped resources. (Source- Sri Lankan Export Development Board, official web page)
Above reasons create a competitive advantage for Sri Lankan Gem and Jewelry Industry among international market.
references-
Armstrong (2006), A handbook of Human Recourse Management Practice
Hatton National Bank annual report (2019) available at,
https://www.hnb.net/2019
Hatton National Bank official Web page available at,
https://www.hnb.net/
Pahuja, et al (2012). Achieving Competitive Advantage through HR Practices: A Case study. Journal of Human Resource Management. 1. 35-43.
Sri Lankan Export Development Board official Web page available at,
https://www.srilankabusiness.com/gem-diamond-and-jewellery/sri-lankas-competitive-advantages.html
QuickMBA official Web page, available at
http://www.quickmba.com/strategy/competitive-advantage/
There is a lot of competition among the organization in the society today and the organization I work for also has the above competition. A strategic competitive advantage is needed to overcome that competition and Establishing such an advantage is the most important goal of any company. In today's world it is essential for business success.
ReplyDeleteExcellent article.
you have selected very significant area wich is ignored by most organization
ReplyDeletein addition to this, according to Caldwell (2004), Managing people as assets that are fundamental to the competitive advantage of the organization.well structured blog hemanthi.
ReplyDeleteCompetitive advantages can be a one reason but there are some more for a organization to be concerned on making sustainable environment, anyway the significant concept have properly connected to the own organization but if you could highlight the position or the rank of HNB among other banks readers will be able to get some more understanding on the literature.
ReplyDeleteIn my view every Organization should have a main competitor to have a great competition
ReplyDeleteWhen a client have a multiple choices to make, the competitor advantage is the decision maker of the client to go for the final pick up. This will ultimately effect to the t/o and performanceas well. Good article.
ReplyDeleteThe main challenge for business strategy is to find a way of achieving a sustainable competitive advantage over the other competing products and firms in a market.
ReplyDeleteA competitive advantage refers an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Good illustration with many practical examples
In today's world, companies wont survive without competitive advantage. It distinguishes a company from its competitors contributing higher prices, brand loyalty and more customers. Companies are striving to establish such a goal in the journey to be success.
ReplyDeleteArticle was prepared well and delivered in proper way. This changing world creates more competitive economy, which leads to gain competitive advantages to. Smart managers will welcome the competition nowadays more organizations rejecting the competitors.
ReplyDeleteEvery organization needs a competitive advantage to differentiate itself from the competition. In the aggressive business world, especially in today’s economy, every advantage counts to establish your business in the top of your industry
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