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There are only two ways to gain competitive
advantage
(Porter & Millar, 1985):
-
Cost leadership—find ways to produce your product or service
or
otherwise operate at a lesser cost than the competition. This
allows
you to either pass the cost savings on to the customer,
as a buying
criteria advantage, or to keep the cost savings as
profit or
investment in marketing.
-
Product/service differentiation—differentiate your product or
service in the eyes of your customers. Give them a reason to
prefer
your alternative to the competition’s even if your price
may be
higher. Differentiation takes pressure off price as a
buying
decision criterion.
continue to
Links
in the Value Chain...>
Porter, ME, & Millar, VE, (1985,
July-August),
How Information Systems Help You to Compete, Harvard
Business Review.
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