Creation of Competitive Advantage in an Optimal Supply Chain
Zachary Drumm
Abstract
Competitive advantage creation allows control over supply chains and allows for more supplier opportunities. It also allows there to be an edge over the competitors and be able to have a better chance at getting better suppliers. To be able to create a competitive advantage it takes many things. Some of the things are to collaborate, stick to the goal, and be able to handle tough situations. Before this though you need to have an optimal supply chain which is all about having a perfect supply chain that can balance the efficiency and responsiveness at a low cost. After achieving that you can create your competitive advantage by making sure you have advantages
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This work and planning will all be focused on balancing the efficiency and responsiveness at a low cost. This is done through whatever plan you have for your supply chain and what business are in it. First is to focus on being able to be efficient enough. This means being able to make products at a good enough rate so that way not too many is made and not too little is made. This has to do a lot with the market and such and this is why you then focus on responsiveness. The responsiveness of a supply chain makes all the difference because it is all about being able to adjust to the market. To obtain this you have to have great communication and be able to coordinate throughout the supply chain. Once the supply chain is able to do those two things it must be able to do it at a low cost. To do that the supply chain needs to practically master agility, quality, and quantity. Once it does that it can minimize costs and produce goods for a lower costs. (What is supply chain optimization, …show more content…
To make sure you can keep the competitive advantage you should make sure you stick to six key things. These six key things are collaboration, sticking to the goal, recognizing the complex and managing the simple, treating issues and not symptoms, focusing on the cost drivers and business impacts, and don’t waste an idea. Collaboration means that you need to continuously work with your supply chain as a unit and attack problems together. Sticking to the goal is a key thing because you can become off target and so you need to make sure you follow the goal you set and stick with it. Recognizing the complex and managing the simple is a key thing and it means you need to handle and spot the complex situations and take care of even the simplest things. Treating issues and not symptoms is a key thing that means that you need to make sure you are treating everything and not just the little problems to something big because it can become worse. Focusing on the costs driven and business impacts means that you need to remain focused on what adds up in your costs so that way you do no spend more. Not wasting an idea is the last key that means that any idea needs to be taken into consideration because it can become up big. Whether it is a product or an idea on how to solve something you should consider it because it could help
To accomplish competitive advantage, and differentiation three elements are crucial; stating the strategies and practicalities, focusing on knowledge based behaviour, and improving the customer relationship management.(Slater and Narve 1995).
There are number of strengths that we posses that will help us to capitalise on a competitive market, these strengths include:
Building blocks of the competitive advantage is very effectiveness, worth, improvement and customer approachability. These particular building blocks in general have four common techniques in cutting down and getting excellence. Anyone can have the capabilities in implementing these.
The use of reliable technology and software which actually help expedite the process should be used. The delivery procedures can be improved by various lean techniques. The inventory can be used reduced using the pull mechanism and cross docking system make the process simplified. The network of suppliers and partners can be created who respect your deadline. The personnel could be trained and the process can be standardized, people who really understand the work.
Competitive advantage is the advantage for the competitors and gained by the offerings from the consumers that have the greater value either by the low prices of the products and by providing the benefits and services to the consumers that denotes the high price. It is a set of the innovative and different features of the company and the products and services sale to the consumers so that company can achieve the targets what they have decided and it is the betterment for the enterprise in the competitive market (Porter, 2011). There are three determinants which can be used in the competitive advantage that what the company produce for their consumers, their target market that what they have to achieved and the competition from the other entity
Thompson, A.A., Strickland, A.J., & Gamble, J. E. (2010). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases: 2009 custom edition (17th ed.). New York: McGraw-Hill-Irwin
The Law of Comparative Advantage was introduced by David Ricardo in 1817 in his book ‘Principles of Political Economy and Taxation’. According to this classical theory, a comparative advantage exists for a country when it has a margin of superiority in the production of a certain commodity over others. Comparative advantage results from differing endowments in the factors of production like technology, natural endowments, climate, etc. among different countries. Therefore, each country exports the commodities which it can produce at a lower opportunity cost or, in other words, lower marginal cost of production and imports the rest. This would ultimately be beneficial for all countries engaging in free trade as each would gain through its specialization
For instance, Harley Davidson may be forced to change their marketing strategy due to the entrance of a new competitor into the market. Second, Harley Davidson has to learn new skills and technologies quickly. For example, technologies are changing rapidly, so it is crucial for Harley Davidson’s business plan to change or alter in order to keep up with innovation. Third, this organization has to effectively leverage its core competencies while competing with its competitors. This is, Flexibility is required for Harley Davidson to learn how to use primary value-chain activities and support functions in the way that allow the organization to produce their products at a lower cost with differentiated features compare to their competitors in the market
of a firm to attain new forms of competitive advantage (Müller, 2011). It is due to these
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which
We can define competitive advantage as simply what a given company excels best at. This could be the distinguishing factor as to why consumers purchase from your company and not the competition. This could also be understood from the perspective of quality that a business can create for the consumer.
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.
If a firm is able to successfully construct a value-creating strategy, then they will have a better chance of gaining a competitive advantage. According to Barney p. 102, “a firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors.”
The human resource management stands for the management of an entity’s workforce and all that relates to the workforce. The significance of human resource management includes recruitment, orientation, and the ability to retain employees. The human resource management with other managers utilizes these practices in order to produce a solution that relates to challenges. A competitive advantage refers to the business ability to gain the advantages of its economic activities that, it recognizes the organization’s ability to survive and overcome competition in the marketplace. This paper will discuss the concept of competitive advantage in human resource.