Week 4: Clear on Competiton and Competitive Advantage in Business

Competitive Advantage & Competition in Business

"PC vs Mac" by Sergio de Candelario Delgado

http://www.flickr.com/photos/hades87/2688943823/

Creative Commons License: http://creativecommons.org/licenses/by-sa/2.0/

This week I was particularly clear on the concept of competitive advantage in business. 

First off, competitive advantage is both good and bad to the industry and it's consumers. When the iPhone first came out, everyone had to have one. Now, phones with an Android operating system have similar capabilities that the iPhone has, almost as if they copied the phone exactly and tweaked a few things.

Competition in Business is GOOD for the industry because:

• It leaves room for improvements in the products in the industry
• Will lead to stronger products with more features
• Will drive innovation so that companies will want to be the head of the industry with the leading product

Competition in Business is BAD for the industry because:

• Companies have to worry about doing any task better than their rivals
• Companies can't do the same thing as each other. They have to be unique
• Companies can copycat products and tweak them to be their own.
• Will lead to bad blood between companies (Mac vs P.C.)

Any product you create needs to be: Valuable, Rare, Imperfectly imitable, & Nonsubstitutable if you wish to come out on top of the industry without any companies stealing your ideas or your product structure. 

In the end, competitive advantage and competition is vital in business because companies live off of copycatting products and making them better. Many "iPhone clones" have helped keep businesses alive because people believe that the product is the iPhone, except better. Without competition, each company would only have very few products, and wouldn't make the revenue they do today.

A link that I found particularly interesting when researching competition and competitive advantage was the following:

http://www.yeartosuccess.com/members/y2s/blog/VIEW/00000008/00000062/Competition-is-Good.html

The link above describes three rules that will help your company benefit from your competition and come out on top.


I hope you enjoyed my blog post for the week! I'll catch you next week! :)