Competitive Advantage ✓ Solved

Competitive Advantagecompetitivity Advantagecompetitive Advantageteres

Competitive advantage is best described on what is based on the customers needs and what is in their minds, that can lead to what you expect in any competition. When using competitive advantage in a real or imagined business, they can be described by using 3 determinants: the benefits of your products, how much competition exists, and who is your target market. The products are based on your customers' needs and how they will value them. The target is to get to know your customer and understand how the product will improve their consumption of the services you are providing.

Providing these services will lead to economic growth for your business. If you offer different products and services that competitors do not, this will keep your customers coming back and attract new customers who find them appealing. I have chosen to write a competitive strategic plan for Terrie’s Barber Shop, which has been in business for about ten years. As times changed, the needs of the shop expanded to offer more services than just cutting hair, resulting in a rebranding to Terrie’s Salon.

With the expansion into a full-service salon, we moved the location to the city center to accommodate the growing needs of our customers and attract new business. The services offered at Terrie’s Salon include haircuts, professional shaving, and grooming for men, as well as haircuts, hairstyling, colorings, and personal grooming for women. By offering these types of services, we have maintained our customer base and attracted new customers as well.

Terrie’s Salon employs competitive pricing for the services offered. We use goals as a guideline that will lead to a vision of realization while the objectives identify the goals for the procedures laid out to achieve them. The goals and objectives for Terrie’s Salon include: attracting new customers and increasing the number of clients by offering salon services at fair prices while nurturing customer relationships; satisfying customer needs with the services they desire; hiring the most experienced employees to deliver professional services; and actively listening to customer feedback to help improve our salon services.

Applying Porter’s Three Generic Strategies for success in business is essential. These strategies include leadership, differentiation, and cost focus. The leadership at Terrie’s Salon recognizes the importance of keeping operational costs down. Implementing a plan that utilizes technology, such as a point-of-sale system for tracking inventory, sales, and space, has helped reduce costs compared to our competitors. This adheres to Porter’s strategy of cost leadership.

Porter’s second strategy involves differentiation, ensuring our products and services are first-class compared to competitors. We achieve this by employing highly qualified professionals who take pride in their work and develop strong client relationships that encourage repeat business. Finally, cost focus provides a means to attract and maintain our clientele. Terrie’s Salon can achieve this through our competitive pricing for products and services tailored to meet customers' needs.

To succeed using Porter’s three generic strategies, Terrie's Salon must maintain a competitive advantage by targeting customer needs and understanding competition. We must adhere to our goals and objectives for ongoing success.

Paper For Above Instructions

Competitive advantage is a strategic advantage that a business has over its competitors, which allows it to generate greater sales or margins and retain more customers than its competition. It arises from factors such as lower costs, product differentiation, or customer service (Barney, 1991). This paper explores how Terrie's Salon can leverage competitive advantage through strategic planning and the application of Porter's generic strategies.

The analysis of competitive advantage begins with an understanding of the market and customer dynamics. For Terrie's Salon, the salon industry is characterized by rapid changes in consumer preferences and increased competition. As such, it is vital to identify what sets the salon apart. The three determinants of competitive advantage mentioned highlight the importance of understanding customer needs, evaluating competitive pressures, and clearly defining the target market.

Terrie’s Salon's recent expansion into a full-service salon was a response to both changing customer expectations and potential market opportunities. In the highly competitive landscape of salons, offering a wider range of services provides an edge. This aligns with the differentiation strategy proposed by Porter, where the salon can stand out through superior services that meet various customer demands (Porter, 1985).

Moreover, pricing strategies play a crucial role in maintaining a competitive advantage. By providing quality services at competitive prices, Terrie's Salon can attract new clients while retaining existing ones. Effective pricing strategies also require a robust understanding of operational costs, ensuring that the salon can maintain profitability while appealing to cost-conscious consumers. This reflects Porter’s cost leadership strategy, aimed at being the lowest-cost producer in the industry (Porter, 1985).

Alongside operational strategies, marketing serves as a critical component in strengthening competitive advantage. A well-crafted marketing plan can help promote services and foster brand loyalty. Leveraging digital marketing platforms, such as social media, allows Terrie's Salon to engage with clients directly, offering promotions and showcasing customer testimonials, thereby building a positive brand image (Kaplan & Norton, 2016).

Customer feedback mechanisms are also invaluable in refining services and adjusting strategies. By proactively seeking input from clients, Terrie's Salon demonstrates commitment to excellence and responsiveness to consumer needs. This can significantly enhance customer satisfaction and loyalty, solidifying the salon's competitive position in the market.

Financial planning is another vital aspect of maintaining a sustainable competitive advantage. Regularly assessing financial performance can guide resource allocation and investments in service development. Ensuring that profits are reinvested wisely into the business—notably in technology and staff training—can create a cycle of growth and improvement (Kaplan & Norton, 2016).

In addition to the strategies and tools discussed, analyzing internal strengths and weaknesses through a SWOT analysis can further clarify the strategic direction for Terrie's Salon. Strengths may include a skilled workforce and customizable services, while weaknesses could reflect areas such as marketing reach or financial constraints. Exploring opportunities in the market—such as emerging trends in beauty services—can allow for expansion, whereas identifying threats, like new entrants, can prepare the salon to respond strategically.

To summarize, for Terrie's Salon to achieve and maintain a competitive advantage, it must effectively integrate a range of strategies, including differentiation, cost leadership, and customer engagement. The strategic plan must be grounded in thorough market analysis and adhered to through actionable objectives.

References

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