primary objection to any company’s strategy

The Need for a Competitive Edge

The main criticism of any business plan is the need to find a means of gaining a long-term competitive edge over the already existing services and goods on the market. By making a SWOT chart, one can include a competition analysis. A list of every competitor is included in this graph, along with a list of the products they sell. The two companies will use the differentiation strategy and cost leadership approach in order for their respective firms to gain a competitive edge. Producing products or rendering services at the lowest possible cost, commonly referred to as a “unique selling price,” is the main goal of cost leadership (Huang, Dyerson, Wu & Harindranath, 2015). It is done on mass production to attain economies of scale. Cost leadership is as essential as a large number of market segments aims at minimizing their costs.

The Differentiation Focus Strategy

Differentiation focus will enable the two companies to differentiate within a small number of targeted market segments, thereby being able to produce according to their customers’ demands. The companies will aim at producing differentiated goods and services from their competitors. This strategy ensures that customers have different wants thereby providing a window of opportunity for differentiation process. In case the existing competitors are not meeting the consumer’s needs, then these two firms can differentiate their products and services to enhance competitive advantage. It is done through value addition of products or services, whereby the products are customized to satisfy individuals need. Here the firms will assure their consumers of better quality and a wide range of products and services (Huang, Dyerson, Wu & Harindranath, 2015).

The Differential Leadership Approach

Differential leadership is another way of enhancing competitive advantage as the business aims at targeting large markets. The firm will charge a premium price which is supposed to cover the extra production cost thereby providing customers with better reasons to choose the product over others which are not or less differentiated. These differentiated products will be reliable, durable, and of good quality. Proper branding methods will be used to adequately provide adequate information about the usage of the product (Huang, Dyerson, Wu & Harindranath, 2015).

Identifying Targeted Market Segments

Before starting business managers have to make a decision and projection of their targeted group of customers. Since we are focusing on two large companies, that is Water Works and Software solutions we will rely on various issues. First, is the geographic position of the targeted market. Potential consumers will have different wants based on their geographical area. For instance, Water Works firm will sell RO water purifiers to people located in non-municipal locations while those in public places will demand UV based purifiers. Second is demographic segmentation, whereby companies use specific variables such as age, gender, size, income, religion, race and nationality to identify their preferred market segments. For example, software solutions target the youth mostly when it comes to social media apps and software such as Facebook and what sup. The third is psychographic segmentation which uses people’s lifestyle that is their interests and activities to define a market segment. For example, Software Solutions provide a range variety of software application, based on a person’s lifestyle; one can be able to choose what to buy concerning the manufacturers’ date of the software. The last is behavioral segmentation which categorizes the population regarding its behavior and decision-making mode. For instance, young people will prefer social media and entertaining software while business people will prefer business-oriented software. Software Solutions company targets Android users by providing various applications for free. Another example of behavioral segmentation is the high amount of purchase of products and services during the holidays and festivals. Both companies can sell better during this season (“Bases of Market Segmentation Success: A Marketing Decision Makers’ Perspective,” 2016).

Conducting a SWOT Analysis

All businesses aim at creating a sustainable competitive advantage over other competing firms. It needs businesses to develop effective business strategies to beat their competitors. To success, companies need to maximize their strengths, work on their weakness and protect themselves against threats. To find out the most promising business plan is to conduct a SWOT analysis. A company’s strength is derived from its knowledge, availability of resources and its ability to utilize the available resources. In this case Water Works Company: a retail foodservice operation will be the most promising business plan. It is due to the readily available resources and efficient allocation of the resources (Huang, Dyerson, Wu & Harindranath, 2015).

For any business to be successful, it should be able to find out its weaknesses that could be exploited by its competitors. It includes limitations or lack of enough resources that may affect the company’s performance. Since Water Works is an agricultural based industry, resources are readily available and at a lower price. This company has a high and wide range of opportunities to pursue. For instance, the products provided by this company fall under the category of basic needs, meaning that this firm will never fail to get a targeted market as its commodities will be sold and consumed daily (Huang, Dyerson, Wu & Harindranath, 2015).

Reference

Bases of Market Segmentation Success: A Marketing Decision Makers’ Perspective. (2016). International Journal Of Business And Administrative Studies, 2(3). http://dx.doi.org/10.20469/ijbas.2.10004-3

Huang, K., Dyerson, R., Wu, L., & Harindranath, G. (2015). From Temporary Competitive Advantage to Sustainable Competitive Advantage. British Journal Of Management, 26(4), 617-636. http://dx.doi.org/10.1111/1467-8551.12104