IDENTIFYING COMPETITIVE ADVANTAGES
Video: Panera Bread
Cohesion Case: Competitive Advantage:Business Dilemma
To survive and thrive, an organization must create a competitive advantage. A competitive advantage is a product or service that an organization's customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage. In turn, organizations must develop a strategy based on a new competitive advantage.
When an organization is the first to market with a competitive advantage, it gains a first-mover advantage. The first-mover advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage. FedEx created a first-mover advantage by creating its customer self-service software, which allows people and organizations to request parcel pickups, print mailing slips, and track parcels online. Other parcel delivery companies quickly began creating their own online services. Today, customer self-service on the Internet is a standard for doing business in the parcel delivery business.
Page 14
As organizations develop their competitive advantages, they must pay close attention to their competition through environmental scanning. Environmental scanning is the acquisition and analysis of events and trends in the environment external to an organization. Information technology has the opportunity to play an important role in environmental scanning.
Frito-Lay, a premier provider of snack foods such as Cracker Jacks and Cheetos, does not just send its representatives into grocery stores to stock shelves; they carry handheld computers and record the product offerings, inventory, and even the product locations of their competitors. Frito-Lay uses this information