Global Strategic Management: Competitive Advantage

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Production of valuable, unique, and hard to imitate products is the best approach that a company can employ to gain a competitive advantage. However, most companies encounter many difficulties in trying to maintain the competitive advantage as explained below.

Competition

All business people aim at having a competitive advantage over their rivals. They aim at producing differentiated products, and selling them at the lowest prices possible. The global business environment has competitors, who aim at being cost leaders without minding about the value of the products that they sell. Such companies resolve to employ the cost leadership strategy to attract customers and achieve the economies of scale competitive advantage.

Although other companies may have unique and valuable products, customers will tend to buy the low-cost products. In such a case, a company that insists on producing valuable, unique, and hard to imitate products will only win the high-class consumers, whereas the cost leaders will win the middle-class and low-class consumers. Generic electronics are considerably cheap, and they are very common in third world nations. Businesses that deal with such products would have thriving businesses in the global environment as compared to those dealing with quality, valuable and hard to imitate products.

High cost of production

It is noteworthy that the cost of producing valuable and unique products is considerably high. The producers of such products will invest in research and development to come up with the hard to imitate products. Therefore, such producers will desire to sell their products at a high price to cater for the production costs. Indeed, highly priced products will only attract few customers while most of the customers will prefer to purchase substitute products, which would be somewhat cheap. Instead of purchasing a valuable, unique, and hard to imitate Apple machine, most consumers would rather buy an IBM machine. While quality sensitive consumers will consider purchasing valuable products, others will purchase substitute products.

Counterfeit products

The companies that manufacture counterfeit products in the world are infinite. Counterfeit products are very common in third world nations where the inexperienced consumers will purchase the products unknowingly. Once developers purchase an original machine, for example, they disassemble the machine to study its components. Thereafter, they make a counterfeit product with a similar physical appearance, and sell it under a slightly different brand name.

People who develop NOKIA counterfeit products sell their products under the name NOKLA. The two names are confusing, and the developers are able to sell their products at considerably low prices since they did not invest in research and development.

Indeed, doing business in the global business is somewhat tricky, as developers will always to reap where they never sowed. Companies might suffer greatly in trying to maintain their capabilities of producing valuable, unique, and hard to imitate products.

The reputation that the public has towards a company may affect its functionality. Companies advertise their products through the media, as it is able to reach many people across the nation. Therefore, when a news organization or an influential politician turns against a company for selfish reasons, the situation becomes tough. However, the firm executives should handle the challenge courageously.

The first step is to find ways to proof that the condemnations from the news organization and the politician are untrue. A lab test would be efficient to prove that the product is not harming the consumers in any way. Thereafter, the company should publicize the lab results for all the consumers to see. If need be, the company can carry out a consumer survey to find out how the consumers perceive the product. Through the survey report, the company can identify the weaknesses of the product and address them accordingly. Moreover, it would be worthwhile to make a stringent analysis of the manner in which the product is harming the communitys environment. If the packaging of the product is unfriendly to the environment, the company can consider changing it.

The resolution to implement Corporate Social Responsibility (CSR) within the capabilities of the organization is commendable. The firm should go ahead and find out the needs of the people in the surrounding society. Participating in initiatives that are beneficial to the society is one of the approaches to address environmental and social issues. Donating to churches, hospitals, and schools would be a worthwhile approach to show social responsibility.

However, if the company cannot afford to give out money, it can offer voluntary services to the areas of the community that need human labor. The company can also choose to invest in a recycling program that will counter the allegation that the companys products are harming the environment.

The shareholders of the company ought to know that running a business in the contemporary world is somewhat tricky, and it needs courageous people. Agreeing to incur the losses and discontinuing production of the item is a cowardly way of handling matters. Provided the manufacturers of the product are confident that the allegations are false, they should fight to the end. The shareholders ought to know that the company is susceptible to many other challenges, and if they do not fight, they will end up closing down the entire business.

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