Sustaining Competitive Advantage Essay Sample

Published: 2022-12-02
Sustaining Competitive Advantage Essay Sample
Type of paper:  Research paper
Categories:  Company Business strategy Customer service
Pages: 7
Wordcount: 1715 words
15 min read

Over the past decades, getting to know how an organization may achieve or maintain sustainable competitive advantages within the ever-crowded marketplaces has proven to be a daunting task for business research managers. In other words, the term sustainable competitive advantages have been described as an edge a company enjoys over its competitors within the industry of operation by providing superior values to its customers which leads to superior profitability and organizational development. A competitive advantage in this perspective, therefore, is what makes an organization's products or services superior to all those choices available to the customers in the market from other rival entities (Yadav, Han & Kim, 2017). Therefore, this paper seeks to analyze and evaluate how Johnson's electronic company's external environment, segmentation and pricing strategies, and customer engagement strategies have been used by the firm to create sustainable competitive advantages. Johnson's electronics company has its primary goal of producing electronic appliances and products such as radios, television sets, and other electronic products.

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The company's external environment

All types of businesses do not operate in a vacuum; rather each business operates within a given environment. Such an environment could either be outside or internal influences that impact the business operations (Yadav et al., 2017). Therefore, the external environment include micro and macro environmental factors. Microenvironment include such factors that may influence company operations directly such as the suppliers, financiers, customers, market intermediaries and public perception (Prajogo, 2016). The macro environment is such factors that include political, economic, technical, sociocultural, legal and environmental factors. One of the primary competitive advantage Johnson's electronic is that it has created a wide variety of products to satisfy the customer's different needs. In other words, the company produces various household electronic appliances and products which offers to the company the economies of scope. Besides, currently, the company produces mobile phones, laptops, computers, and other related devices. In economies of scope, the company's average total production cost will decreases when it produces varieties of products. Economies of scope will, therefore, ensure that the company has a cost advantage because of its complementary range of products and at the same time concentrating on its core competencies (Letterie, 2017).

With a decrease in the cost of production, the company thus achieve its product differentiation strategy of low-cost products. That is, a decrease in the average cost of production will lower the cost of commodity prices in the market thus increasing the demand for such commodities (Nagle & Muller, 2017). In other words, the company must, therefore, increase its production to meet its customers demand in the market by supplying more of its commodities. An increase in demand will increase the company's profitability index because of higher sales/economies of scale, which is core to the maximization of competitive advantages (David & David, 2016). Moreover, higher profitability will see the company have financial muscles which can enable it to build more sustainable company operations such as acquisition and expansion. Financial strength has enabled the firm to employ the use of current production, marketing, and management technology which not only ensure that they produce quality but also provide an efficient business operation management process. For instance, the company has adopted the use of corporate performance systems and data management systems to ensure that the firm is not left behind.

Johnson's electronic operates under a monopolistic market structure where a wide variety of small firms compete against each other. In monopolistic competition, competing companies sell similar but differentiated products which provide them with a particular degree of market power to charge higher prices within a particular range (Nagle & Muller, 2017). In the case of Johnson's company, the company ensures that it gains a larger market share among its competitors by producing a wide variety of electronic products at cheaper prices to increase its sales index hence higher profitability. Low-cost products have enabled the firm to penetrate and expand its market to different countries across Asia and Africa through business internalization.

In summary, the analysis of Johnson's electronics external environment can be evaluated in the context of its objectives, competitors, SWOT analysis, and external factors evaluation. For example, regarding its competitors, the company has its base in Shenzhen, China where the local market is favorable and that the country's geographical location makes it inaccessible because of its higher cost of taxes and trade tariffs linked to importation of external merchandise. Moreover, the company has its strength of higher market share in Africa because of its affordable goods. It has a business opportunity based on a higher number of trade agreements signed between several African states and China. However, the company has its weakness in the quality of its products compared to those from global firms like Samsun, LG, and Sony and among other electronic firms. Its primary weakness lies in the weaker Chinese Yuan against the dollar.

Segmentation and Pricing Strategy of Your Organization

Segmenting the business market implies the process of grouping and sub-grouping a larger and homogeneous marketplace into clear and recognizable segments/units. The units are always made up of similarities in needs, demands or want characteristics. The aim of market segmentation is to enable organizations to emphasize on their marketing approaches on several pre-determined market segments to achieve competitive advantages within such marketplaces (Osterwalder et al., 2014). In the case of Johnson's electronics company, market segmentation strategy is well understood. The company targets its customers by dividing the market into various segments while providing each unit/segment different products based on those consumer's common characteristics. The divisions of the market are based on demographic, geographic, psychographic and behavioral segmentation. The company uses this type of segmentation to lower risks by deciding whom, where, how and when its products will be marketed (Yadav et al., 2017).

Johnson's geographic segmentation focuses on its Asian market whether the region is divided into north, southeast and western regions while different countries with Asia are targeted in different ways such as either the Indian market, Chinese market among other markets. Its demographic segments are based males and females but do not include age since most of its product users range between 7-60 years. Moreover, the company's products are provided with various features to a different cluster of individuals based on their levels of income (Nagle & Muller, 2017). Additionally, the customers are divided based on their occupation that includes regular employees, businessmen/women, and students. The company's psychographic segmentation involve classifying customers on various levels regarding their lifestyle and personalities. For instance, the company's advertisement on its television sets is based on the slogan, for loving and ambitious customers.

Johnson's electronics has its behavioral segmentation based on those customers' intended purpose of the products they intend to find in those products. For instance, some customers may be seeking excellent quality and beautiful designs. Moreover, the company has knowledge of the user's status regarding its target customer with the aim of being able to deliver its products better. In this context, the customers are divided as into potential users, ex-users, regular and first-time users. That has enabled the firm to achieve its customer target founded on their loyalty. Moreover, these segments provide the company with an easy determination of what the customers at different locations or segment needs or wants (Osterwalder et al., 2014). In other words, the segments have enhanced the company's marketing and sales decisions making based on who wants the product, which product to take to this segment and which types of customers' needs this product.

In the context of positioning, Johnson's electronics has embraced the innovative technologies combined with styles with a sole purpose of targeting the young professionals especially when it comes to smartphones edge designs including the new premium feel to its current phones. The new positioning strategy has ensured that the organization differentiates itself from its initial cost leadership structure by providing higher quality products at affordable prices. That is, while prior to this the company did not emphasize on its products designs. Currently, the firm focuses too much on the designs of its products to achieve the current generation's product needs and wants especially the youth. Consequently, the company has also positioned itself as an innovative company where its products have innovative features, integral parts of families, healthy living and energy efficiencies; hence as a cost-saving venture to its customers. Such positioning strategies can be seen to support the company's market segmentation strategy (Osterwalder et al., 2014). For instance, the company's positioning of producing innovative product features targets the youthful users who value the looks and the features that come with the products especially the smartphones.

At Johnson's electronics, there is no basic pricing strategy since different pricing approaches are adopted by the firm based on the customers and the type of the product. In other words, since the company has various categories of products, it follows several varieties of pricing strategies. These pricing approaches are put into categories to match the product that it is intended to (Holiday, 2014). The primary and widely used pricing strategy at the company is price skimming where the organization first charge higher prices which the customers are to pay but reduces the cost after some duration. With such a plan, the company brings a new commodity into the market and set higher prices to get a higher value at the beginning before its competitors imitate the product. As soon as the product establishes itself in the market, its price starts to lower slowly. That strategy is primarily used in the company's television, refrigerators, and other electronic home appliances categories. The most significant aim of price skimming is to allow the company to compete effectively with its rivals.

Critical Analysis of Customer Interaction

In a bid to succeed in making a sustainable living commonplace, Johnson's electronics engage and work in partnership with a wide range of stakeholders. Such stakeholders include investors, customers, suppliers, regulators and government and among other businesses through trade associations. The company thus communicate to its customers while promoting direction through client-centered management by practicing continuous communication with its clients and employees. Communication with clients is through the voice of customer and customer satisfaction surveys and meetings (Kumar & Pansari, 2016). Customer engagement at the firm also emphasizes keeping their privacy as a way of increasing satisfaction. The company also communicate with its shareholders through regular the shareholder's meetings to share the organization's management issues.

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