Examples Of Companies With Competitive Advantage

Companies with Competitive Advantage

There are many types and sources of competitive advantages but I won’t be writing on that in this article.

However, I will be highlighting five examples of companies with a competitive advantage who emerged major forces in their markets by employing all the competitive advantages at their disposal.

I have compiled the list of examples of companies with competitive advantages in their sector.

List of Companies with a Competitive Advantage

The business world is reputed to be an environment of intense competition. This competition by the different players, in this case the businesses, is aimed at gaining an edge over the next similar businesses offering same services.

The business world is divided into niches, each aimed at providing particular services or meeting particular needs and wants. Some businesses/companies even go the extra mile of creating desirable wants. In this case, what attracts the client or customer is the perceived comfort or pleasure it would add to his/her life.

Businesses/Companies are driven by the quest for profits. To gain an upper hand over similar businesses, they introduce certain measures that will attract patronage. These introduced measures are usually in the form of incentives to the benefit of the client, intended to win customer loyalty. Competitive advantage consists primarily of incentives that stand a business out by attracting higher patronage.

Coping with Competition

In the business world, in an industry where competition exists, it is usually intense, resulting in the emergence of winners and losers. These are usually determined by the market. Winners are usually the big businesses favoured by the competition, while losers are the smaller companies that fall out resulting in their closure due to their inability to favourably compete in the same turf with the larger businesses.

Competitive Advantage and its Impact on Companies/Businesses

Competitive advantages are in most cases guarded jealously. This is because if exposed, other businesses can use the information to gain an advantage over the company that had this competitive advantage. Doing this will automatically result in the loss of this critical advantage a company has over its competition. Having a competitive advantage sustains the longevity of a business.

For publicly quoted companies, having a strong competitive advantage makes the difference between an increased value of its investor shares or a dwindling or drop in the value of its investor shares. Competitive advantages can be either single or multiple.

Having multiple competitive advantages increases the chances for success of a business and offers greater advantages over other similar business with lesser or not competitive advantages at all.

List of Competitive Advantages and their Factors

There are factors which when present results automatically in a business having competitive advantage over its peers. No matter the type of business or company, once a business possesses these characteristics, it is most likely to witness better chances of success in its business than other companies that do not possess these. Some of these factors include technology, low cost of doing business, access to capital and the scale of business.

How Technology Contributes to Competitive Advantage

Under technology, a company that invests resources into research and the development of new products and services, years before they are released to the market will certainly maintain a healthy lead over its peers. Investing into the future ensures that while other businesses are trying to stay afloat in business through the concentration of their efforts in the now, the company deploying technology is looking at the future of the market by developing innovative products which when released will not be matched by any other product or services developed by its rivals.

The Apple Company is an example of a company that deploys technology and innovation in maintaining its lead over its competition the use of technology and innovation.

Low Cost of Doing Business

This is a contributory factor that increases the competitive advantage of a company. A company that has a low cost business model with less debts and a young and vibrant workforce untouched by the impact of unionism, which also possesses the necessary equipment, or in the absence of such does not necessarily have to spend much on the purchase of its equipment, or knows where to find equipment at much cheaper rates than what is obtainable in the marketplace is more likely to have a competitive advantage over its peers.

Access to Capital and its Contribution

A company that generally accesses funding at much reduced or lower rates that its competition has a competitive advantage over its competition. It means that it can gain access to funds necessary for funding its business operations at much reduced rates than what is available for its competition who have to access these funds at higher interest rates, and as a result attracting higher overhead cost than the business/company that has the competitive advantage.

The Scale of the Business

A business operating at a much higher and bigger scale is much more likely to have a favourable competitive advantage over a business operating on a much smaller scale. In the event that it releases new products to the market, its scale of doing business which includes a diverse distribution network ensures that its products and services achieve the widest reach possible within the shortest possible time.

The Cost of Being a Market Leader

There is a cost businesses have to pay by being market leaders or being competitively advantaged over other similar business. These costs are in the form of the provision of a reasonable value of products and services at lower prices than what is obtainable in the market place. This creates an increased patronage among consumers, resulting in customer loyalty to the business brand.

Competitive Advantage of Different Companies

The most influential value of competitiveness is derived from innovation. Unique business models have a way of attracting competitive advantages apart from product properties. Let’s look at Amazon. Although we are used to selling books, but selling them online was a completely different initiative. Find more interesting business models investing in companies and sectors with strong competitive advantage instead of trying to enhance traditional product features and benefits. Below is a list of companies with great competitive advantage.

List Of Companies With Sustainable Competitive Advantage

Competitive Advantage Of Companies Example

1. —–» Procter & Gamble Co. (PG): This company realizes over 60% of its sales from small emerging markets

2. —–» International Business Machines Corporation (IBM): The business exploits its highly skilled manpower and enviable patents to become a leading brand.

3. —–» Facebook: By increasing accessibility of various categories of people from several platforms, this giant social network is now a multi-Billion dollar project.

4. —–» Nestle: Nestle became a brand name re-packaging their products for small and middle-income earners. They associated their products with ‘loyal’ markets such as sports and kids.

5. —–» Abbott Laboratories (ABT): The solid patency of many medications and supplements in cardiovascular and eye diseases gave this business a great competitive edge.

These are just few examples of companies with good competitive advantage that you can study their models.