I will talk about competitive advantages in this article. I will present you the four main competitive advantages that company can go for when making a new product. What is important to know is that one advantage usually negate the other. For example if we go for low price, we cannot go for high quality. So we need to decide which competitive advantage we’re going to focus on. To do that, we need to know all our options.
First advantage we can focus all has already been motioned. This are low costs and as a consequence low price. How can we achieve that? Well we need to take out all the costs that do now add value. Once we do that we need to optimize all the processes to achieve maximum productivity. We need to select machines that produce with lowest costs, even though this means a little lower quality.
Second advantage we can focus on is quality, also already mentioned. At this competitive advantage of production, we focus on high quality, even if we need to set the price higher because of that. We will select top machines for bigger price and our targeted market will be different. We have two “sub-advantages” in quality advantage. First one are properties of a product and the second one is compatibility. Don’t need I need to explain these two in more details.
Third advantage is flexibility of our production program. This is the span of different products we can make. For example custom made computers at Dell is a nice example.
The last but not least important advantage is delivery. Here we also have two sub-advantages. First one is speed of delivery and the second one is reliability. So first one means how fast we deliver the products and second one is how sure a customer can be, that we will deliver products on the time we have said we will.
Remember that competitive advantage in production actually means selecting the target market and then adapting the production to this market demands. Hope you now know what types of competitive advantages in production there are.