The Four Approaches to Competitive Advantage discusses four approaches to compet

Question

The Four Approaches to Competitive Advantage discusses four approaches to competitive innovation that will help to achieve corporate strategic intent. These include building layers of advantage, searching for loose bricks, changing the terms of engagement, and competing through collaboration. Building layers of advantage addresses the benefits of a wide portfolio of resources such that a company faces less risk in competitive battles. Finding loose bricks in the competitor's wall of defense is necessary to break in to markets and challenge competitors. Changing the terms of engagement involves changing the terms of competitive engagement in any advantageous way while still manufacturing and selling products and services. Collaboration of smaller companies in order to combine resources allows smaller companies to be competitive in oligopoly type markets.

Questions

When was your company established, and what resources have they integrated during their history?

How has your company staked out under defended territory of their competitors?

How has your company changed the terms of competitive engagement with their competitors?

How has your company collaborated with other companies when bidding on contracts?

Is your company a collaboration of older firms?

Explanation / Answer

1) The company was established in 1976 as an integrated fertilizer manufacturing unit. It has got a capacity to manufacture 2 million tonnes of nitrogenous and phosphate fertilizers in its two production units established in the year 1976. The resource integration has been extensive for the company wherein the company has been able to secure sources of ammonia and phosphate mines which act as sources of raw materials. It also has forward integration through establishment of an exhaustive distribution network that is used for efficient distribution of fertilizers manufactured at the facility.

2) The company has been able to gain market share in the home markets of the competitor through innovative product introduction and efficient distribution of making products available on need basis when the competitor’s products were on short supply. Thus through a combination of customizing product specifications as per customer needs and effective fulfilment, it has been able to gain a foot hold and increase in market share in the markets dominated by the competitors.

3) The terms of competitive engagement has been altered by focussing on efficient distribution rather than focussing on price alone. It was thought that price was a dominant factor and reduction of price was a means to gain market share, however by focussing on distribution and fulfilling demand as and when the need arises, the company has been able to achieve high level of customer satisfaction and prevent stock outs. This has altered the competitive engagement between the company and its competitors.

4) The company has not collaborated with other companies in bidding for contracts. It is also not a collaboration of older firms. The only collaboration the company engages in is with suppliers and channel partners for procurement of certain raw materials and also for the distribution of fertilizers through its vast network of retailers.

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