Competitive Advantage Discussion.
Competitive Advantage Discussion.
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Enclosed is 2 discussion questions with responses from other students. Please provide feedback to their response. Competitive Advantage Discussion.
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Discussion Question: The primary means for gaining and sustaining competitive advantages for companies are shifting downstream. Is that also the case in a circular economy? Explain and discuss these statements.
Response 1: To effectively market a product or service, companies focus on upstream and downstream activities to target consumers. Upstream activities are long-term plans, while downstream activities are short-term plans. Both marketing strategies are equally important. The upstream marketing process analyzes audience issues, product/service solutions and identifies pricing (Stanton, 2020). This process is crucial because it determines a company’s position and identifies its oncoming audience (Stanton, 2021).
In contrast, downstream marketing analyzes consumer behavior and how to convert them to become a consumer. Companies that understand their customers and provide products and services that appeal to their consumers are more likely to increase sales and revenue growth. Acknowledging and understanding consumer preferences such as what a consumer might need or want will give a company an advantage (Stanton, 2021). Once a company thoroughly analyzes its chosen target audience, it can adequately create campaigns to market its product and services.
A circular economy reduces, reuses, and recycles products and services to decrease waste and increase wealth. Companies gain a competitive opportunity because the products and services in a circular economy are designed to allow them to be reused. Once a product or service is cycled, a business will have to rethink how to design, manufacture, and identify its customer role (The Circular Economy in Detail, 2017). Competitive Advantage Discussion.
References
Stanton, C. (2021). Upstream vs. Downstream marketing: Explained. Retrieved from https://cmox.co/upstream-vs-downstream-marketing-explained/
The Circular Economy In Detail. (2017). Retrieved from https://archive.ellenmacarthurfoundation.org/explore/the-circular-economy-in-detail
Response 2: According to Dawar (2013), there needs to be a shift in strategy downstream from products to the customers. Shifting downstream gives companies a competitive advantage as it puts the focus on customers and building customer loyalty for a particular brand (Dewar, 2013). Dewar (2013) explained that downstream industries are focused on reducing costs for customers, which improves the competitive edge for companies. “The sources of competitive advantage are shifting away from production processes inside the firm to customers and markets outside the firm (David, 2014).” So, customer behavior is part of the downstream and plays a role in the success of a company Industries need to switch from upstream (sourcing, production, logistics, etc.) to downstream by changing their strategy (Dewar, 2013). Businesses have to “emphasize how they define their competitive set, influence customers’ purchase criteria, innovate to solve customer problems, and build advantage by accumulating customer data and harnessing network effect” (p. 108) to compete in the market. Therefore, the focus needs to be on customer behavior so that customer loyalty and trust can be established.
A circular economy primary means for gaining and sustaining competitive advantage by focusing on “strategies to reuse, refurbish, recycle, minimize, eliminate, share, and optimize material and energy use while maintaining firm profitability” (Nandi, Hervani & Helms, 2020, p. 193). Circular economies want to preserve natural resources, reduce emission levels, mitigate material losses, enhance renewable and recyclable resource utilization, and enhance the product’s lifetime value (Nandi, Hervani & Helms, 2020). Nandi, Hervani & Helms (2020) explained that the circular economy is needed because it helps to address environmental issues as well as help businesses to manage resources. Companies like Starbucks, which are focused on sustainability and the environment, have a competitive edge over their competition because they are innovative, and use their resources effectively. They have put the focus on recycled products (compostable “sippy” cups) to appeal to environmentally concerned customers, by reducing unnecessary waste, and producing products that will last (reusable) giving them the edge. In 2018, Starbucks released its “Greener Stores” plan. They announced that they were going to open 10,000 environmentally friendly stores worldwide by 2025, eliminate plastic straws by 2020 globally, and are implementing practices that will reduce power usage by 25% and water by 30% (Snider, 2018). By investing funding into the circular economy, Starbucks stands out against its competition because they want to change customers’ behaviors and have a positive impact on the environment.
References:
David, F. (2014). Are the primary venues for competitive advantage for most companies shifting
downstream? Strategy Club. Retrieved from https://www.strategyclub.com/are-the-primary-venues-for-competitiveadvantage-for-most-companies-shifting-downstream/
Dawar, N. (2013). When marketing is a strategy. Harvard Business Review, 91(12), 100. Retrieved from
68e813c18663%40sessionmgr4008
Nandi, S., A. Hervani, A., & Helms, M. M. (2020). Circular Economy Business Models—Supply Chain
Perspectives. IEEE Engineering Management Review, 48(2), 193–201. https://doiorg.
lopes.idm.oclc.org/10.1109/EMR.2020.2991388
Snider, M. (2018). Starbucks brews a greener plan for 10,000 environmentally friendly stores. USA
Today. Retrieved from https://www.usatoday.com/story/money/business/2018/09/13/starbucks-greener-stores-ecofriendly/
1291573002/
Discussion Question: Define and give an example of a “blue ocean strategy” in a digital economy.
Response 1: The blue ocean strategy ” is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant ” (Kim & Mauborgne, 2020). In other words, it refers to the vast marketing options that occur when an unknown industry or innovation occurs. Or in the vast marketing options that occur when an unknown industry or innovation occurs. In the past few decades technology has been growing and developing exponentially thus resulting in many situations where the blue ocean strategy can help explain what is happening (Kim & Mauborgne, 2020). Blue ocean strategy denotes a marketplace for a product in business with very little competition or no rivalry. It rotates around looking for an industry in which few companies function. Additionally, the blue ocean strategy revolves around searching for business where there is no pricing pressure. The Blue ocean approach may be used across businesses or sectors. The reason is that usage of the blue ocean strategy is not restricted to one business. Moreover, this situation comes when the business is operating in an unsaturated market. As a result, it makes the products not face pricing pressure, and thus the firm’s operations will not be under threat. In the past few decades technology has been growing and developing exponentially thus resulting in many situations where blue ocean strategy can help explain what is happening with never before seen products. For example, when Nintendo released the Wii the launch’s main focus was on value innovation. The company wanted to reduce costs so it had to remove the hard disk and DVD drive. The company also had to stand out from its competition and that’s how the wireless motion control stick came to be. The wireless motion control stick was a new feature at the time and was offered at a lower price.
Kim, C., & Mauborgne, R. (2020). What is Blue Ocean Strategy: About Blue Ocean Strategy. Blue Ocean Strategy. https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/.