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The process of positioning for competitive advantage simply refers to the methods by which a company or organization may apply certain strategies that will enable it to have a competitive edge over its rivals or competitors. Organizations may apply several methods in positioning themselves toward competitive advantage. Most importantly a company must find ways to produce its products and services better and more effectively than the competitors, to reduce operational costs, and to make its products or services more appealing to the consumers. Some of these methods include various forms of differentiation and cost control.
Controlling the cost involved in the production of goods and services will help a company further the process of positioning for competitive advantage. A company may achieve this advantage through various methods aimed at minimizing costs. One of these methods is to produce goods that can be obtained at a cheaper rate than the competitors. For instance, a company that produces orange juice will have a competitive advantage if it is situated in an area where oranges are cultivated and produced in large quantities. This will help the company reduce various overhead costs, such as the cost of transportation, import and customs duties, as well as loss from spoilages during transportation.
One of the methods by which differentiation can enable a company press toward positioning for competitive advantage is through the process of product differentiation. This simply means that a company will study the products of other rival companies with the aim of coming up with a concept that will allow its products to stand out among an offering of similar products produced by competitors. In the example above, the company with the advantage of producing its orange juice near the source of the raw materials may be able to channel this toward competitive advantage. It may achieve this by capitalizing on the fact that the oranges are fresh and are bottled within a day of being harvested. Such a tactic will appeal to consumers who may decide to purchase the product because it is not made from concentrates like other orange juice offerings.
Another way in which differentiation can help a company achieve competitive advantage is through people differentiation. This method necessarily involves the human resources department of the company because it deals with people, specifically, the employees of the company. These employees may be trained to be very courteous and solicitous of the needs of the customers. Such little attention to detail often adds up toward positioning for competitive advantage.