Competitive advantage of firms on a global scale. Forming a company's competitive advantages: a step-by-step plan

⏱ reading time: 15 minutes

The goal of a marketing strategy is to understand and cope with the competition. Some companies are always ahead of others. Industry affiliation does not matter - the gap in the profitability of companies within one industry is higher than the differences between industries.

The differences between companies are especially important during times of crisis, when the created competitive advantage is an excellent foundation for profitable growth.

Competitive advantages of the company

• Advantage Any success factor that increases a consumer's willingness to pay or reduces a company's costs.
• Competitive advantage- a success factor that is significant for the consumer, in which the company surpasses all competitors

Building a competitive advantage means achieving a greater gap between costs and customer willingness to pay for a product than your competitors.

Step 1. Determine success factors

The answer to the question “how to create a company’s competitive advantage” is not so important. If you are confident that you will achieve competitive advantage through 24/7 delivery, then you will find a solution to realize this competitive advantage. It is much more difficult to determine what exactly they will become.

To do this, first of all, we write down all the advantages, or success factors, that are important for buyers. For example, like this.

Step 2. Segment the target audience

A separate shuttle for business class passengers is an advantage. But achieving this competitive advantage is completely irrelevant to those flying in the economy segment. Determination of competitive advantages always occurs for a specific segment target audience- with her specific needs and desires.

The decision to sell to “everyone” leads to questions about where to look for these “everyone” and what to offer them. It turns out that “everyone” must be searched “everywhere” and offered “everyone”. This strategy will kill the budget of any company.

Let's take the example of achieving competitive advantages for a company selling flowers. Among the target audience, we will highlight the segments of those who buy flowers impulsively, prepare a pre-planned gift or, say, decorate their homes.

Having determined for whom we are going to create a competitive advantage, we will evaluate whether it is worth it - we will give an assessment of the market capacity and the intensity of competition in each segment.

Read more about segmentation criteria in our article: “”

Step 3. Determine key success factors

The buyer is demanding. Many factors are important to him - from the consultant’s smile and website design to low prices. But just because a buyer wants something doesn’t mean he’s willing to pay for it.

The value of a competitive advantage is the buyer's willingness to pay for it. The more money they are willing to pay for the development of a competitive advantage, the higher its significance.

Our task is to form a very short list of key success factors from the long list of various consumer “wants” that can determine the company’s competitive advantages.

In our example, the key success factors are the same for all three target audience segments. In real life, each segment usually has 1-2 of its own factors.

Step 4. Assess the importance of key success factors for target audience segments

What is important to one segment of the target audience may be a weak competitive advantage for consumers from another segment.

If you have an idea to buy flowers to give them this evening, then for an impulsive decision the main thing is appearance (fullness of bud opening) and speed of purchase. This is more important than the ability to choose from a large assortment, the lifespan of the bouquet - it is necessary that the flowers be present and look good this evening.

The opposite situation is buying flowers to decorate your home. Delivery is not a problem, but the question of how long the flowers will last comes to the fore.

Therefore, the importance of key success factors is determined for each segment of the target audience separately.

*) we clarify - CFUs are taken as an example, close to life, but do not reflect the real case.

For our company, identifying the right competitive advantages that allow our clients to attract more consumers, get more money from them and interact with them longer is one of the main blocks of the developed marketing strategy. Therefore, we strive to achieve an ideal situation - when every cell of all tables in this article is expressed in money. You can create a working marketing strategy only by understanding the cost of CFU from the buyer’s point of view, market volume, costs, etc.

All this information can be obtained. But sometimes there is no time or resources for this. Then we recommend using a comparison on a 5 or 10 point scale. In this case, remember that any factual data is better than guesswork. Hypotheses must be put forward based on the company’s big data, monitoring customer reviews, monitoring the sales process of competitors, and not taken from the head “because it seems so to me.” Expert forecasts too often fail.

Step 5. Compare the achieved competitive advantages

At this point, we have figured out what is important to your consumers. This is good. It’s bad that competitors are also aware.

To understand the starting conditions, it is necessary to assess the current degree of development of the company's competitive advantages. Strictly speaking, you only have a competitive advantage when your offering outperforms all of your direct competitors on some key success factor.

The assessment of competitive advantages is made exclusively from the point of view of consumers. The opinion of the company's employees, and especially the management, does not say anything. The director may be proud of the website developed according to his idea, on which millions were spent, but this in no way indicates the convenience of the site for clients.

Step 6. Determine sources of competitive advantage

Any competitive advantage is the result of a company’s activities. Each action incurs costs and at the same time affects the buyer's willingness to purchase the product. Differences in the results of these actions form competitive advantages.

Therefore, we compile a list of all the company’s activities by desegregating its activities into separate processes. In projects, we begin the analysis with the activities that are necessary to produce the basic product or service, and only then add related activities.

Step 7. Linking key success factors and company activities

Competitive advantage is formed at the intersection of various activities. For example, an increase in the assortment in the flower trade requires an increase in working capital, the availability of storage space for products, a sufficient area of ​​sales points, additional qualifications of sellers and service personnel, etc.

We determine which business processes are associated with the development of each of the found competitive advantages and the size of their contribution.

Step 8. Assess the company’s costs for creating competitive advantages

At this step, we look at how much it costs to achieve a competitive advantage. Any company activity has its costs.

In our example, we estimate the level of costs on a 10-point scale, but in real life, a company must more or less accurately know its costs. Pay attention to the calculation methodology - usually accountants tend to record most of the costs in production, thereby reducing indirect costs.

Having understood the size of costs, we determine their drivers. Why are the costs what they are? Maybe we pay a lot for shipping because the business size is small and we don't have enough freight? There are many cost drivers. They depend on the size of the firm, its geographical location, institutional factors, access to resources, etc.

Cost driver analysis helps estimate the costs competitors will have to create a similar competitive advantage. It is difficult to obtain data directly, but by understanding the drivers that influence the amount of costs, we can predict the volume of competitors' expenses.

Step 9. Looking for resources to create a competitive advantage

Maintaining the achieved competitive advantage at a constant level is only possible if sufficient resources are available. In addition, analysis of the resources that the company has helps to choose an area for quickly developing a competitive advantage.

Step 10. Choosing a direction for developing a competitive advantage

We look at the two resulting final pictures and think. There are only three possibilities for achieving competitive advantage:

• increase willingness to buy a product without significantly increasing costs
• dramatically reduce costs with virtually no impact on willingness to buy
• increase willingness to buy and reduce costs at the same time.

The third direction looks the most attractive. But finding such a solution is extremely difficult. Typically, companies simply waste valuable resources trying to create a competitive advantage across the board.

Basic rules for determining competitive advantage.

• We are looking for options that create the largest gap between the buyer’s desire to pay and our costs.
• We don’t try to select all the attractive options at once. Having decided to occupy one peak, we will no longer climb another. It is most profitable to choose a peak that is not crowded with competitors.
• We remember our competitors and what motivates each of them. If you decide to change some business process, how will your closest competitor react to this?

• Success factors. The more you find, the better. Typically, managers tend to focus on a few product features. This reduces the perception of the benefits that the consumer receives and brings your marketing strategy closer to that of your competitors. To find competitive advantages that are less competitive, think about the benefits a company creates for all its stakeholders: customers, employees, suppliers, dealers, and so on.
• Key success factors. The more significant the factor, the more restructuring of the company’s activities it requires. If you are not one of the industry leaders, it is better not to immediately try to compete on the main factors, or groups of factors (“best in quality”)
• Market. The question should not be “can we create a competitive advantage for this segment of the target audience”, but “can we create a competitive advantage for this segment of the target audience and remain profitable.” Having current costs in hand, we assume how much the company will pay to turn a key success factor into a full-fledged competitive advantage
• Current competitive position. It's difficult to build a competitive advantage in which you're hopelessly behind. Especially if it is a capital-intensive or time-consuming process.
• Costs. Competitive advantage can be achieved by focusing on costs that are most different from competitors, are large enough to influence the overall cost structure and are associated with discrete activities.

Fear often gets in the way of building a competitive advantage. The desire to become the best will certainly entail an increase in prices or, conversely, a decrease in the desire to buy our product. Reducing costs reduces the client’s desire to use our service (a ticket to a low-cost airline is cheap, but you can’t take luggage with you, there’s no food, airports are far away). Improving product characteristics leads to increased costs. This is absolutely normal. All that matters is the widening gap between the buyer's willingness to pay and the company's costs.

Step 11. We create competitive advantages by changing the company’s actions

As I wrote above, the creation of competitive advantages is the result of the company’s actions. To make the offer superior to all competitors, it is necessary to reconfigure some of the activities.

For example, achieving a competitive advantage " low cost" There is no point in trying to compete with a discounter by simply lowering prices. A successful discounter has become so due to the fact that most of the company's activities are subordinated to creating this competitive advantage. If a Walmart employee wants to get a new pen, he returns the old one, which is covered in writing. There are no small details in creating a competitive advantage.

Again we look at the connection between the chosen competitive advantage and the company’s activities. Where is this competitive advantage created? And we invest specifically in the development of selected business processes.

Ask yourself the following questions

• Are our actions different from those of our competitors?
• Are we doing the same things but in a different way?
• How can we change our actions to gain competitive advantage?

As a result, determine the minimum and sufficient set of activities that the company must perform in order to form a competitive advantage. Usually they try to copy only obvious things, forgetting that much is hidden under water. It is the complex of activities that creates a competitive advantage that cannot be copied.

Actions aimed at developing a competitive advantage must be connected by a single logic. M. Porter's classic example is the set of actions of SouthWest Airlines that created its competitive advantage. As a result, the airline was the only low-cost airline on the market for 25 years. It is impossible to achieve a similar competitive advantage overnight.

In essence, this is a marketing strategy. This set of actions is almost impossible to copy and surpass.

In contact with

Classmates

From this article you will learn:

• What are the types of competitive advantages of a company?
• What are the company's main competitive advantages?
• How the company's competitive advantages are formed and assessed
• How to use competitive advantages to increase sales

Over time, humanity reaches new heights, gaining more and more knowledge. This also applies to business. Each company is on the hunt for the most profitable marketing solutions, trying to do things differently and demonstrate its products in the best light. All enterprises sooner or later face competition, and therefore the company's competitive advantages play an important role in the market, which help the consumer decide on the choice of product.

What are the company's competitive advantages?

Competitive advantages companies are those characteristics, properties of a brand or product that create for the company a certain superiority over direct competitors. Economic development is impossible without competitive advantages. They are part of the company's corporate identity and also provide it with protection from attacks by competitors.

A company's sustainable competitive advantage is the development of a profitable development plan for the company, with the help of which its most promising opportunities are realized. Such a plan should not be used by any actual or prospective competitors, and the results of the plan should not be adopted by them.

The development of a company's competitive advantages is based on its goals and objectives, which are achieved in accordance with the company's position in the market for goods and services, as well as the level of success in their implementation. Reformation of the functioning system should create a basis for effective development factors of the company's competitive advantages, as well as create a strong relationship between this process and existing market conditions.

What are the different types of competitive advantages of a company?

What competitive advantages of the company can be identified? There are two types of competitive advantages:

1. Artificial competitive advantages: individual approach, advertising campaigns, guarantee and so on.
2. Natural competitive advantages of the company: product costs, buyers, competent management and so on.

An interesting fact: if a company does not strive to get ahead in the market for goods and services, classifying itself among a number of similar enterprises, it somehow has natural competitive advantages. In addition, she has every opportunity to develop artificial competitive advantages for the company, spending some time and effort on this. This is where all the knowledge about competitors is needed, since their activities need to be analyzed first.

Why do you need an analysis of a company's competitive advantage?

An interesting note about Runet: as a rule, about 90% of entrepreneurs do not analyze their competitors, and also do not develop competitive advantages using this analysis. There is only an exchange of some innovations, that is, firms adopt the ideas of competitors. It doesn’t matter who came up with something new first, it will still be “taken away”. This is how such clichés came to light:

• Highly qualified specialist;
• Personal approach;
• Highest quality;
• Competitive cost;
• First class service.

And others, which in fact do not represent the company’s competitive advantages, since no self-respecting enterprise will declare that its products are of low quality and its staff are newbies.

Oddly enough, this can be looked at from the other side. If the competitive advantages of companies are minimal, then it is easier for start-up companies to develop, that is, to gather their potential consumers, who receive a wider choice.

Therefore, it is necessary to competently develop strategic competitive advantages that will provide customers with a profitable purchase and positive emotions. Customer satisfaction should come from the business, not the product.

What are the sources of a company's competitive advantage?

There is a fairly well-established structure of the company's competitive advantages. Michael Porter once identified three main sources for developing a company's competitive advantage: differentiation, cost and focus. Now in more detail about each of them:

• Differentiation

The implementation of this strategy for the company's competitive advantages is based on more efficient provision of services to the company's clients, as well as demonstrating the company's products in the best light.

• Costs

The implementation of this strategy is based on the following competitive advantages of the company: minimal employee costs, automated production, minimal costs of scale, the ability to use limited resources, as well as the use of patented technologies that reduce production costs.

• Focus

This strategy is based on the same sources as the previous two, but the company’s adopted competitive advantage covers the needs of a narrow circle of customers. Customers outside this group are either dissatisfied with the company's competitive advantages or are not affected by it in any way.

The main (natural) competitive advantages of the company

Every company has natural competitive advantages. But not all enterprises cover them. This is a group of companies whose competitive advantages are either, as they believe, obvious or disguised as generally accepted clichés. So, the main competitive advantages of the company are:

1. Price. Whatever one may say, one of the main advantages of any company. If prices for a company's goods or services are lower than competitive prices, as a rule, this price gap is indicated immediately. For example, “prices are 15% lower” or “we offer retail products at wholesale prices.” It is very important to indicate prices this way, especially if the company operates in the corporate sphere (B2B).
2. Timing (time). It is imperative to indicate the exact delivery time of products for each type. This is a very important point when developing a company's competitive advantages. Here it is worth avoiding imprecise definitions of terms (“we will deliver quickly”, “we will deliver on time”).
3. Experience. When your company’s personnel are professionals in their field who know all the “pitfalls” of doing business, then convey this to consumers. They like to collaborate with specialists whom they can contact for all questions of interest.
4. Special conditions. These may include the following: exclusive supply offers (discount system, convenient location of the company, extensive warehouse program, included gifts, payment after delivery, and so on).
5. Authority. The authority factor includes: various achievements of the company, prizes at exhibitions, competitions and other events, awards, well-known suppliers or buyers. All this increases the popularity of your company. A very significant element is the status of a professional expert, which involves the participation of your employees at various conferences, in advertising interviews, and on the Internet.
6. Narrow specialization. This type of competitive advantage is best explained with an example. The owner of an expensive car wants to replace some parts in his car and is faced with a choice: contact a specialized salon that services only cars of his brand, or a standard auto repair shop. Of course, he will choose a professional salon. This represents a component of a unique selling proposition (USP) that is often used as a company's competitive advantage.
7. Other actual benefits. Such competitive advantages of the company include: a wider range of products, patented manufacturing technology, adoption of a special plan for the sale of goods, and so on. The main thing here is to stand out.

Artificial competitive advantages of the company

Artificial competitive advantages are able to help a company talk about itself if it does not have any special offers. This may come in handy when:

1. The company has a similar structure to its competitors (the competitive advantages of companies in a particular field of activity are the same).
2. The company is located between large and small enterprises (it does not have a large range of products, does not have a narrow focus and sells products at a standard price).
3. The company is at the initial stage of development, without any special competitive advantages, client base or popularity among consumers. This often happens when specialists decide to leave their workplace and create their own enterprise.

In such cases, it is necessary to develop artificial competitive advantages, which are:

1. Added value. For example, a company sells computers without being able to compete on price. In this case, you can use the following competitive advantage of companies: install an operating system and the necessary standard programs on your PC, and then slightly increase the cost of the equipment. This is the added value, which also includes all sorts of promotions and bonus offers.
2. Personal adjustment. This company's competitive advantage works well if competitors hide behind standard clichés. Its purpose is to demonstrate the face of the company and apply the WHY formula. Has success in every field of activity.
3. Responsibility. Quite an effective competitive advantage for the company. It goes well with personal development. A person likes to deal with people who can vouch for their products or services.
4. Guarantees. Generally, there are two types of warranties: circumstance (for example, a liability guarantee - “if you don’t receive a receipt, we will pay for your purchase”) and product or service (for example, the ability for a consumer to return or exchange an item within up to one month).
5. Reviews. Unless, of course, they are ordered. For potential consumers, the status of the person speaking about your company is important. This advantage works great when reviews are presented on a special form with a certified signature of a person.
6. Demonstration. It is one of the main competitive advantages of the company. If the company does not have advantages, or they are not obvious, then it can make an illustrated presentation of its product. If the company works in the service sector, then you can make a video presentation. The main thing here is to correctly focus on the properties of the product.
7. Cases. But there may not be any cases, especially for new firms. In this case, you can develop artificial cases, the essence of which is to provide services either to yourself, or to a potential buyer, or to an existing client on the basis of mutual offset. Then you will receive a case that will show the level of professionalism of your company.
8. Unique selling proposition. It has already been mentioned in this article. The meaning of the USP is that the company operates with a certain detail, or provides data that sets it apart from its competitors. This competitive advantage of the company is effectively used by the Practicum Group, which offers training programs.

Personnel as a company's competitive advantage

Unfortunately, today not every management sees the company’s excellent competitive advantage in its personnel. Based on the developed strategies and goals, firms come to the need to build, develop and strengthen the necessary personal qualities employees. But at the same time, companies come to the need to apply a certain combination of developed strategies (this also applies to internal management).

Based on this, you need to pay attention to a couple of important points: identify and develop the qualities of personnel, creating a competitive advantage for the company, and explain the usefulness of investing in this resource.

If the goal of management is to create a competitive advantage for the company in the person of its personnel, then work on the personal characteristics of employees, as well as the concept of the essence and effectiveness of aspects that are identified in team work (emergence and synergy) are very important.

The process of establishing a team as a company’s competitive advantage is not complete without resolving some points that the company’s management must take into account:

1. Competent organization of employee activities.
2. Employees' interest in successfully achieving their goals.
3. Forming a desire among the team to actively participate in the process of obtaining high results.
4. Supporting the personal qualities of employees required by the company.
5. Developing company commitment.

It is worth paying attention to the essence of the proposed aspects that form the competitive advantage of the company in the person of its personnel.

Quite a few well-known large organizations win in the competition precisely due to the effective use of personnel as a competitive advantage of the company, as well as due to the gradual increase in the level of interest of employees in achieving their goals. The main criteria for success in the process of using all possible resources are: the desire of employees to remain part of the company and work for its benefit, the dedication of the staff to their company, the confidence of the staff in success and their sharing of the principles and values ​​of their company.

It is characterized by the following elements:

• Identification. It assumes that employees have a sense of pride in their company, as well as the factor of goal appropriation (when staff accept the company’s goals as their own).
• Engagement. Assumes employees' willingness to invest own strength, actively participate in achieving high results.
• Loyalty. It assumes a psychological attachment to the company, a desire to continue working for its benefit.

These criteria are extremely important in shaping the company’s competitive advantage in the form of its personnel.

The degree of employee commitment is closely related to the level of staff response to external or internal stimulation.

When developing a company's competitive advantage in the person of its personnel, it is worth noting some aspects that reveal the dedication of employees:

• Dedicated employees strive to improve their skills.
• Committed employees rely on their views without being manipulated or otherwise negatively influenced.
• Dedicated employees strive to achieve maximum success.
• Loyal employees are able to take into account the interests of all team members and see something beyond the boundaries of the goal.
• Dedicated employees are always open to something new.
• Loyal employees have a higher degree of respect not only for themselves, but also for others.

Loyalty is a multifaceted concept. It contains the ethics of the team, the degree of its motivation, the principles of its activities, and the degree of job satisfaction. This is why a competitive advantage in the form of personnel is one of the most effective. This dedication is reflected in the relationships employees have with everyone around them in the workplace.

When management wants to create a competitive advantage in the personnel, the task arises of creating loyalty among employees. Prerequisites for formation are divided into two types: personal characteristics of employees and working conditions.

The competitive advantages of the company in the person of its personnel are formed using the following personal characteristics of employees:

• Reasons for choosing this field of activity.
• Work motivation and work principles.
• Education.
• Age.
• Family status.
• Existing work ethic.
• Convenience of the company's territorial location.

The competitive advantages of the company in the person of its personnel are formed through the following working conditions:

• The level of employee interest in achieving maximum success of the company.
• Employee awareness level.
• The degree of stress of employees.
• The degree to which the important needs of employees are met (salary, working conditions, opportunity to express their creative potential, and so on).

But it is also necessary to take into account the dependence of loyalty on the personal characteristics of the staff and the atmosphere in the companies themselves. And therefore, if management has set out to create a competitive advantage for the company in the person of its personnel, it first needs to analyze how acute the problems in this company are that could negatively affect the loyalty of employees.

Brand as a company's competitive advantage

Today, in order to fight competitors, companies include additional services in the list of core services, introduce new methods of doing business, and prioritize both staff and each consumer. The company's competitive advantages stem from analyzing the market, developing a plan for its development, and obtaining important information. Firms, in the process of competition and constant change, need to work both with the internal management of the organization and with the development of a strategy that ensures a strong position of stable competitiveness and allows them to monitor the changing situation in the market. Today, in order to maintain competitiveness, it is important for firms to master modern principles of management and production, which will allow the company to create a competitive advantage.

A company's trademark (brand), when used correctly, can increase its income, increase the number of sales, replenish the existing assortment, inform the buyer about the exclusive advantages of a product or service, stay in this field of activity, and also introduce effective development methods. This is why a brand can serve as a company's competitive advantage. Management that does not take this factor into account will never see their organization among the leaders. But a trademark is a rather expensive option for a company’s competitive advantage, the implementation of which requires special management skills, knowledge of company positioning methods, and experience working with a brand. There are several stages of development trademark, related specifically to the topic of its relationship with competition:

1. Goal setting:
   • Formulation of the company's goals and objectives (the initial stage for the formation of any competitive advantages of the company).
   • Establishing the significance of the brand within the company.
   • Establishing the necessary position of the brand (characteristics, longevity, competitive advantages of the company).
   • Establishing measurable brand criteria (KPIs).

1. Development layout:
   • Assessment of existing resources (the initial stage for the formation of any competitive advantages of the company).
   • Approval of customers and all performers.
   • Approval of development deadlines.
   • Identify additional goals or obstacles.

1. Assessment of the existing position of the brand (applies to existing brands):
   • Popularity of the brand among customers.
   • Brand awareness of potential customers.
   • Potential customers' affinity for the brand.
   • Degree of brand loyalty.

1. Assessment of the market situation:
   • Assessment of competitors (the initial stage for the formation of any competitive advantages of the company).
   • Assessment of a potential consumer (the criteria are preferences and needs).
   • Assessment of the sales market (supply, demand, development).

1. Statement of the essence of the brand:
   • The purpose, position and benefit of the brand to potential customers.
   • Exclusivity (competitive advantages for the company, value, characteristic features).
   • Trademark attributes (components, appearance, main idea).

1. Brand management planning:
   • Work on developing marketing elements and explaining the brand management process (entered in the organization’s brand book).
   • Appointment of employees responsible for promoting the brand.

1. Introduction and increasing the popularity of the brand (the success of the company’s competitive advantages in terms of brand promotion depends on this stage):
   • Development of a media plan.
   • Ordering advertising materials.
   • Distribution of promotional materials.
   • Multifunctional loyalty programs.

1. Analysis of the effectiveness of the brand and the work performed:
   • Assessment of the quantitative characteristics of the brand (KPI) established at the first stage.
   • Comparison of the results obtained with the planned ones.
   • Amending the strategy.

A necessary criterion for the effective implementation of a trademark as a company’s competitive advantage is adherence to a single corporate style, which represents the visual and semantic integrity of the company’s image. The components of corporate style are: product name, trademark, trademark, motto, corporate colors, employee uniforms and other elements of the company’s intellectual property. Corporate style is a set of verbal, color, visual, individually developed constants (components) that guarantee the company the visual and semantic integrity of the company’s products, its information resources, as well as its general structure. Corporate style can also act as a company’s competitive advantage. Its existence indicates that the head of the company aims to make a good impression on clients. The main goal of branding is to evoke in the client the positive feelings that he experienced when purchasing the products of this company. If other marketing components are at their best, then the corporate style can create some competitive advantages for the company (specifically within the framework of the topic of opportunities for competition):

• Positively affects the aesthetic position and visual perception of the company;
• Enhances efficiency collective work, can unite the staff, increases the interest of employees and the feeling of their need for the organization (the competitive advantage of the company in the person of the staff);
• Contributes to the achievement of integrity in the advertising campaign and other marketing communications of the organization;
• Reduces communication development costs;
• Increases the effectiveness of advertising projects;
• Reduces costs for selling new products;
• Makes it easier for customers to navigate information flows and allows them to accurately and quickly find the company’s products.

A brand association consists of four elements that are also important to consider when developing a company’s competitive advantages:

1. Intangible criteria. This includes everything that deals with information about the brand: its idea, degree of popularity and distinctive features.
2. Tangible criteria. Here the impact on the senses plays a very important role. These criteria can be functional (a special form for more convenient use, for example), physical, as well as visual (display of the brand on advertising materials). Both tangible and intangible criteria are necessary when developing a company's competitive advantages.
3. Emotional characteristics. A brand represents a company's competitive advantage when it evokes positive emotions and trust among customers. Here it is necessary to use tangible criteria (for example, a unique advertising campaign). Experts say that these criteria create an opinion among customers about the intangible characteristics of the brand.
4. Rational characteristics. They are based on the functional criteria of the product (for example, fuel-efficient vehicles from Volkswagen or Duracell batteries that last “up to ten times longer”), on the way they communicate with consumers (an example is Amazon), and on relationships between customers and the company that owns the brand (promotions for regular customers from various airlines). Taking into account rational characteristics is very important when forming a company’s competitive advantages.

When developing a company's competitive advantages, it is necessary to know the main carriers of the corporate style components:

• Elements of service components (stickers big size, large panels, calendars mounted on the wall, and so on).
• Office components (corporate forms, registration forms, blocks of paper materials for notes, and so on).
• Advertising on paper (catalogs, all types of calendars, booklets, prospectuses, etc.).
• Souvenir products (fountain pens, T-shirts, office stationery, etc.).
• Elements of propaganda (materials in the media, decoration of halls for various events, propaganda prospectus).
• Documentation (business cards, passes, personnel identification cards, etc.).
• Other forms (corporate banner, packaging materials with company symbols, employee uniforms, etc.).

The brand also affects the competitive advantage of the company in the person of its personnel, contributing to the unity of employees who feel their importance for the organization. It turns out that a trademark is an element of the company’s development process, increasing its income and sales, as well as helping to replenish the product range and increase customer awareness of all the positive aspects of a service or product. These conditions also strengthen the company's competitive advantages.

Competitive advantages of the company: examples of global giants

Example No. 1. Apple's competitive advantages:

1. Technologies. This is one of the main competitive advantages of an innovative company. Each element of software and technology is developed within the same enterprise, and therefore the components are in perfect harmony as a whole. This makes the developer's work easier, ensures high quality products and reduces production costs. For the consumer, comfort in use and elegant appearance of the devices play an important role. A complete set of necessary parts and programs is not only a company’s competitive advantage, but also a fact that forces consumers to purchase new gadgets.
2. HR. One of the company's leading competitive advantages is its staff. Apple hires high-quality professionals (the most able-bodied, creative and advanced) and tries to keep them in the company, providing decent wages, various bonuses for personal achievements. In addition, it saves the cost of unskilled employees and child labor at supplier plants Inventec and Foxconn.
3. Consumer trust. With the help of an effective PR and marketing strategy, an organization is able to create a regular customer base for itself, as well as increase the popularity of the brand. All this increases the success of applying the competitive advantages of international Apple. For example, the company collaborates with promising musicians (YaeNaim, Royksopp, Feist, and so on). The most well-known organizations (for example, SciencesPoParis) enter into contracts for the complete completion of their libraries with the company’s products. There are about 500 stores around the world that sell only Apple products.
4. Innovation. This is the main competitive advantage of an innovative company. By investing in R&D, the organization quickly responds to emerging customer needs. An example is the Macintosh, developed in 1984, which gained commercial popularity and had graphical elements that were popular among users, as well as changes to the command system. The first iPhone was released in 2007 and gained immense popularity. MacBookAir does not lose its position, still remaining the thinnest laptop of our time. These competitive advantages of the company are a great success and they are undeniable.
5. Organization of the supply chain. Popularity Apple brand contributes to the fact that the company has concluded many productive agreements with supplier factories. This ensures the firm's own supply and cuts off supplies for competitors who need to purchase the required components from the market at a higher cost. This is a great competitive advantage for the company, which weakens its competitors. Apple often invests in improving its delivery process, which results in more revenue. For example, in the 90s, many companies transported computers by water, but Apple overpaid about $50 million on the eve of Christmas for transporting products by air. This competitive advantage of the company eliminated competitors, because they did not want or did not think of transporting goods in this way. Moreover, the company maintains strict control over suppliers, constantly requesting documentation of expenses.

Example No. 2. Competitive advantages of the Coca-Cola company

1. .Main advantages The main competitive advantage of the Coca-Cola trading company is its popularity, because it is the largest brand among soft drink manufacturers, with about 450 types of products. This brand is the most expensive in the world; it includes 12 more manufacturing companies (Sprite, Fanta, Vitaminwater, Coca-Cola Lite, and so on). The company's competitive advantage lies in the fact that it is the first supplier of all types of soft drinks.
2. Technologies from Soca-Cola(this is the main competitive advantage of the company). There were many who wanted to know the secret recipe for the drinks. This recipe is in the Trust Company Of Georgia safe deposit box in the USA. Only a few senior managers of the organization can open it. The already produced drink base is sent to manufacturing plants, where it is mixed with water using a specialized, precise process. Creating this base for a drink today is far from the easiest task. The trick is that the composition of the drink contains “ natural flavors", the specific elements of which are not specified.
3. Innovation(this also includes the company’s competitive advantage in the field of ecology):
   • The company wants to improve low sales with modern equipment. Such machines are capable of dispensing more than 100 types of drinks and making original mixes (light cola and diet cola, for example).
   • The Coca-Cola Company's environmental competitive advantage lies in its Reimagine recycling program. This makes it easier for the company’s management to dispose and sort waste. In such a machine you can put containers made of plastic and aluminum, excluding the sorting process. In addition, the device awards points that are used to purchase company drinks, branded bags and to visit various entertainment projects.
   • This competitive advantage of the company works well because the company strives to produce an environmentally friendly product. In addition, Coca-Cola is developing a program to use eStar cars, which operate without harmful emissions due to electric motors.
4. Geographical advantage. The geographical competitive advantage of the company as a construction company is that it sells its products in 200 countries around the world. For example, in our country there are 16 Coca-Cola manufacturing plants.

Example No. 3. Competitive advantages of Nestlé.

1. Product range and marketing strategy. The company's competitive advantage lies in the fact that it operates a wide range of products, as well as a large assortment of brands that strengthen it in the product market. The products consist of approximately 30 major brands and a huge number of local brands. Nestle's competitive advantage lies in creating a national strategy that is based on people's needs. For example, the Nescafe coffee drink, which has a different production structure for different countries. It all depends on the needs and preferences of the buyer.
2. Effective management and organizational structure. A very significant competitive advantage for the company. An indicator of success is the company's sales increase by 9% in 2008, which was considered a crisis year. The organization successfully manages personnel and effectively finances new projects and programs. These programs involve the purchase of shares of other companies, even competing ones. Thus, the company's competitive advantage lies in its expansion. In addition, the company's decentralized management system and competent management of its structures help Nestle quickly respond to market changes.
3. Innovation. An extremely significant competitive advantage of the company is that it is the largest investor in scientific projects and technological innovations that contribute to the development of the company through the introduction of technologies that satisfy customer needs, product differentiation, and improving taste sensations. Moreover, innovation is used to modernize manufacturing processes. This competitive advantage of the company solves the issue of optimizing manufacturing and producing an environmentally friendly product.
4. Global presence in world markets. The company’s undeniable competitive advantage, which is based on the history of its creation, because from the moment it appeared on the market, it gradually expanded and improved, covering the whole world. Nestle is interested in bringing consumers closer to the company. It allows its divisions to independently appoint managers, organize the production and delivery process of products, and cooperate with reliable suppliers.
5. Qualified personnel. This competitive advantage of the company in the person of personnel lies in the large costs the company spends on training its employees at the international level. Nestle creates a highly qualified management team from its employees. The workforce in our country numbers approximately 4,600 people, and the company's global human resource is about 300 thousand employees.

Example No. 4. Toyota's competitive advantages

1. High quality products. The main competitive advantage of the company is a top-level product. In our country in 2015, about 120 thousand cars of this brand were sold. The fact that this competitive advantage of the company is decisive, said its ex-president Fujio Cho. And therefore, when buying a Toyota car, the consumer is guaranteed a set of modern technological developments.
2. Wide range of models. Toyota showrooms operate all models of the brand's cars: Toyota Corolla (compact passenger car), Toyota Avensis (universal and comfortable car), Toyota Prus (new model), Toyota Camry (a whole series of cars is presented), Toyota Verso (car for the whole family), Toyota RAV4 (small SUVs), Toyota LandCruiser 200 and LandCruiserPrado (popular modern SUVs), Toyota Highlander (all-wheel drive crossovers), Toyota Hiace (comfortable, small car). This is an excellent competitive advantage for the company, because the model range of cars is presented for consumers with different preferences and financial capabilities.
3. Effective marketing. An excellent competitive advantage of the company is the certification of vehicles with inspections from Toyota Tested. Customers who buy such a car in our country have the opportunity to receive round-the-clock assistance, which consists of constant work of technical support services. The company's cars can be purchased through the Trade-In program, which simplifies the purchase due to favorable offers from Toyota.
4. The customer comes first. Another important competitive advantage of the company, for which Toyota developed the “Personal&Premium” program in 2010, presenting it at the international automobile show in Moscow. The program includes the availability of favorable loan offers when purchasing a car. Specialists from the New Car Buy Survey organization have found that Russian consumers are most loyal to Toyota.
5. Effective company management. This competitive advantage of the company is expressed in the presence of an effective ERP program that can control the entire set of activities for the sales of Toyota cars in Russia online. The program was developed in 2003. The uniqueness of this program in Russia lies in its combination with the market position, with various features of doing business in our country, with our existing laws. Another competitive advantage of the company is its comprehensive corporate structure, which helps the company and its partners quickly operate with data on the availability of certain product models in showrooms, warehouses, and so on. Moreover, Microsoft Dynamics AX contains all the documentation on operations carried out with cars.

Example No. 5. Competitive advantages of Samsung Group

1. Consumer trust. The company was founded in 1938 and over many years of hard work has achieved tremendous results (for example, 20th place in brand price, second place in equipment). Consumer trust is the most important competitive advantage of Samsung Group. The document management organization turned out to be the “most reliable” in the world. These are indicators that demonstrate how the company's history, its brand and customer trust turn into a huge competitive advantage for the company.
2. Company management. This competitive advantage of the company lies in its vast experience in the field of management, as well as in constantly improving methods of management in changing market conditions. For example, the recent reform of the company, carried out in 2009, led to the fact that the company's divisions gained more independence, thereby simplifying the entire management process.
3. Technologies. This company's competitive advantage lies in the fact that it works with high technology. Samsung Group pioneered the technology of reciprocating and rotary compressors, optical fiber, energy application and concentration. In addition, the company has developed the thinnest lithium-ion power supplies. The company's competitive advantages as a construction company are manifested in the fact that it ranks first in the development of communication systems for business areas of activity and is moving forward in the creation of technologies for gas and oil pipelines, as well as other areas of construction.
4. The company has an innovative advantage. This competitive advantage of the company lies in the fact that it works tirelessly in the field of equipment modernization and innovative product components. The organization contains many scientific units around the world. They carry out research activities in the field of chemical current resources, software and various equipment. Samsung is implementing a scheme to promote electrical engineering and is working on ways to retain energy resources. The company's competitive advantage is also the hiring of highly qualified employees from different parts of the world. In addition, the corporation partners with the best technological universities in the world, investing in their developments and ideas.
5. Successful marketing system of the company. The company's competitive advantage is also a strong marketing campaign in many areas of activity (in its competition with Apple Corporation, Samsung pursued a rather aggressive advertising policy, trying to surpass it). A division of the company called Cheil Communications operates in this area. It works in the field of advertising, marketing analysis and market situation analysis. In addition, an element of the company’s competitive advantage is its assistance in the field of charity, which attracts consumers to it and increases its popularity. The corporation also has special departments for charity issues.

How a company's competitive advantages are formed from scratch

Of course, any organization has its pros and cons, even when it does not occupy a leading position and does not stand out in the market. In order to analyze the causes of these phenomena and develop effective competitive advantages for the company, you need to turn, oddly enough, to your own consumer, who, like no one else, is able to competently assess the situation and point out the shortcomings.

Customers can point to various competitive advantages of a company: location, reliability, simple preference, and so on. It is necessary to compile and evaluate this data in order to be able to increase the profitability of the enterprise.

However, this is not enough. Put the strengths and weaknesses (what you have and what you don't) of your firm in writing. To develop effective competitive advantages for a company, it is worthwhile to clearly and specifically indicate all the details, for example:

Abstraction	Specifics
Reliability guarantee	Our reliability is our specialty: we insure transportation for 5 million rubles.
Professionalism guaranteed	About 20 years of experience in the market and more than 500 developed programs will help us understand even the most difficult situations.
We produce high quality products	We are three times ahead of GOST in terms of technical product criteria.
Personal approach to everyone	We say “no!” briefs. We work only individually, working out all the important details of the business.
First class service	Technical support 24 hours seven days a week! We solve even the most complex problems in just 20 minutes!
Low production cost	Prices are 15% lower than market prices due to the production of our own raw materials.

Not all of the company’s competitive advantages should be reflected in this block, but here it is important to indicate all the pros and cons of the organization, from which you will need to build.

Focus, divide a piece of paper into two parts and start adding the pros and cons of your company there. Then evaluate the shortcomings and turn them into competitive advantages of the company. For example:

Flaw	Turning into an advantage
Distance of the company from the city center	Yes, but the office and warehouse are nearby. Then buyers will be able to park their car without any problems and evaluate the quality of the product right on the spot.
Price is higher than competitive	The price includes additional services (for example, installation on a computer operating system and all major programs).
Long delivery time	But the range includes not only standard set products, but also exclusive products for individual use.
Newbie company	But the company has modern qualities (mobility, efficiency, a new look at things, and so on).
Limited product selection	But there is confidence in the originality of a certain brand and a more detailed knowledge of the product.

It's not all that complicated here. Then, using this list, it is necessary to develop the company's competitive advantages from the most important to the most insignificant. They should be clear to the potential client, concise and effective.

There is also an aspect that is kept secret by many companies. It can be used periodically when the company’s other competitive advantages cannot be realized or when it is necessary to enhance the effectiveness of its advantages. The advantages of the organization must be properly combined with meeting the needs of the consumer.

Illustrative examples:

• Was: Work experience – 15 years.

• Became: Cost reduction by 70%, thanks to the company's many years of experience

• Was: Reduced prices for goods.

• Became: The cost of products is 20% lower, and transportation costs are 15% lower due to the presence of our own vehicles.

How to assess a company's competitive advantages

The success of a company's competitive advantages can be assessed through a full assessment of the advantages and disadvantages of the company's position in the competition and comparison of the results of the analysis with the indicators of competitors. The analysis can be carried out by referring to the method of exponential assessment of the CFU.

A well-developed action plan can turn the shortcomings of rival firms into competitive advantages for your company.

The criteria for this analysis can be:

• The firm’s stability in protecting its position within the framework of market changes in its industries, fierce competition and competitive advantages of competing companies.
• The company has effective competitive advantages or a lack or lack thereof.
• Opportunities for achieving success in competition when operating with this action plan (the company’s position in the competitive system).
• The level of sustainability of the company in the current period.

Analysis of competitors' activities can be carried out using the method of weighted or unweighted assessments. The former are determined by multiplying a company’s score on a certain indicator of competitive capabilities (from 1 to 10) by its weight. The second assumes the fact that all efficiency factors are equally important. A company's competitive advantages are realized most effectively when it has the highest ratings.

The last stage assumes that company specialists must identify strategic mistakes that negatively affect the formation of the company’s competitive advantages. An effective program should include ways out of any difficult situation.

The task of this stage is to create a comprehensive list of problems, overcoming which is of paramount importance for the formation of the company’s competitive advantages and its strategy. The list is derived based on the results of an assessment of the company’s activities, the market situation and the position of competitors.

It is impossible to identify these problems without addressing the following points:

• In what cases is the adopted program unable to protect the company from external and internal problem situations?
• Is the adopted strategy providing a decent degree of protection from current competitors' actions?
• To what extent does the adopted program support and combine with the company's competitive advantages?
• Is the adopted program effective in this area of ​​activity, taking into account the impact of driving forces?

It is necessary to try to ensure that the company's competitive advantages are used by product sales specialists. They, as a rule, have extensive knowledge about the product and the company, but not about the competitors of their own organization, which is a serious mistake. Knowing the competitive advantages of your company and the ability to work on competitive advantages is one of the important skills of sales managers.

Almost everyone has the opportunity to implement a discount system. Proper use The company's competitive advantages are expressed not in dumping, but in the art of strengthening the position of its organization and its interests.

To master this art, you can take part in trainings from the Practicum Group organization. It provides services for conducting training programs that help improve the performance of staff, management, the company's competitive advantages, as well as increase sales and strengthen relationships with consumers.

Service list:

• “PROFESSIONAL” sales manager training program.
• Trainings for managers and employees.
• Management training.
• Trainings at the specialized center “Practicum Group”.

The founder of the Practicum Group organization is Evgeniy Igorevich Kotov. It has been operating since 2006 and during all this time it has managed to train more than 40 thousand people: employees, managers, managers of all types, and so on.

The organization covers about 100 cities in the CIS countries, as well as Turkey, Moldova, Latvia, Kyrgyzstan and Kazakhstan

Competitive advantage is those characteristics and properties of a product or brand, as well as specific forms of business organization that provide the company with a certain superiority over its competitors.
Competitive advantage is always relative in comparison with the enterprise that occupies the best position in the market for goods or services.
A competitor's relative advantage is determined by various factors. Depending on the advantages created, competitiveness factors are divided into two groups:
external;
internal.
Competitive advantage is " external"if it based on distinctive product qualities, which form value for the buyer in terms of quality level, design, special characteristics, etc. The strategy resulting from external competitive advantage is a product differentiation strategy. It is based on marketing know-how and the company's excellence in identifying and meeting customer expectations that are not satisfied with existing products.
Internal competitive advantage is based on superiority(leadership) of the enterprise production and management costs. Internal advantage ensures greater profitability, the enterprise's resistance to reductions in product prices and is therefore valuable to the manufacturer. A strategy based on internal competitive advantage is a cost dominance strategy. It is based mainly on know-how in production and management.

Internal competitive advantage is based on the firm's superiority in terms of costs, which allows it to achieve lower production costs than its competitors.

It should be borne in mind that lower cost gives the company an advantage if the product meets the industry average quality standard. Otherwise, a product of poorer quality may be sold through a reduction in its price, which reduces the share of profit. Accordingly, in this embodiment, the cost advantage does not provide benefits.

A strategy based on internal competitive advantage is a cost dominance strategy. It is based mainly on know-how in production and management.

External competitive advantage is based on the distinctive properties of a product or service that have a greater " consumer value» for the buyer than similar products of competitors. This allows you to set higher sales prices than competitors that do not provide the corresponding distinctive quality.

A strategy based on external competitive advantage is a product differentiation strategy. It is based on marketing know-how and the company's excellence in identifying and meeting customer expectations that are not satisfied with existing products.

So, competitive advantages can be defined as the high competence of an enterprise in any area, which creates the best opportunities to overcome the influence of competition, attract consumers and maintain their commitment to the company's products. Competitive advantages ensure that consumers are offered a product that is of value to them and for which they are willing to pay.

8. Features of bankruptcy of strategic enterprises and organizations. Measures to prevent bankruptcy of strategic enterprises and organizations.
Strategic enterprises and organizations mean:
federal state unitary enterprises and open joint-stock companies

a, whose shares are in federal ownership and which produce products (works, services) that are of strategic importance for ensuring the defense capability and security of the state, protecting morality, health, rights and legitimate interests of citizens. Strategic enterprises and organizations are considered unable to satisfy the claims of creditors for monetary obligations and (or) fulfill the obligation to make mandatory payments if the corresponding obligations and (or) obligations are not fulfilled within six months from the date on which they should have been fulfilled.
To initiate bankruptcy proceedings for a strategic enterprise or organization, requirements are taken into account that total no less than five hundred thousand rubles.
In order to prevent bankruptcy of strategic enterprises and organizations, the Government of the Russian Federation in the manner established Federal law and other regulatory legal acts of the Russian Federation:
organizes accounting and analysis of the financial condition of strategic enterprises and organizations and their solvency;
carries out reorganization of strategic enterprises and organizations;
carries out the repayment of the federal budget debt to strategic enterprises and organizations that are performers of work under the state defense order resulting from late payment of the state defense order;
ensures the restructuring of debt (principal and interest, penalties and fines) of strategic enterprises and organizations that perform work under the state defense order to the federal budget and state extra-budgetary funds;
facilitates the achievement of an agreement between strategic enterprises and organizations with creditors on the restructuring of their accounts payable, including by providing state guarantees;
carries out pre-trial reorganization of strategic enterprises and organizations in the manner prescribed by this Federal Law;
carries out other measures aimed at preventing bankruptcy of strategic enterprises and organizations.
The person participating in the bankruptcy case of a strategic enterprise or organization is the federal executive body that ensures the implementation of a unified state policy in the sector of the economy in which the relevant strategic enterprise or organization operates.
An external management plan for a strategic enterprise or organization may provide for transactions not related to the debtor’s business activities related to:
· sale of the enterprise;
· alienation or encumbrance of real estate;
· disposal of other property of the debtor, the book value of which is more than five percent of the book value of the debtor’s assets, determined on the basis of the financial statements for the last reporting period;
· receiving and issuing loans (credits), issuing sureties and guarantees, assigning rights of claim, transferring debt, as well as establishing trust management of the debtor’s property;
· alienation and acquisition of shares, shares of business partnerships and companies;
· concluding simple partnership agreements

The external manager does not have the right to refuse to fulfill the debtor’s contracts related to the performance of work under the state defense order, ensuring federal state needs in the field of maintaining the defense capability and security of the Russian Federation. The external manager does not have the right to alienate certain types of property, property and other rights that are part of the property complex of the debtor - a strategic enterprise or organization intended to carry out activities related to the implementation of work under the state defense order, ensuring federal state needs in the field of maintaining defense capability and security of the Russian Federation.

9 Standard anti-crisis PR plan.

Before a crisis situation occurs, the following areas should be developed and implemented in the organization. 1. Public relations policies and procedures. Approval of authority, priorities, program, leadership. 2. A crisis communications plan is one of the most important parts of a crisis plan. 3. Information picture of the organization. 4. Information on each program. Content and timely updating are most important. This can be saved in electronic format or printed on a special information sheet. 5. Useful links in crisis situations. Accessible educational films, publicly available information. 6. List of key people. Work and home telephone numbers, information about work, powers, areas of responsibility - the board, top management, responsible persons in each division. 7. Determination of those responsible for public relations, having experience speaking in front of a wide audience. These employees must be aware of the organization's public relations channels. 8. Determining the principles of interaction with the media. They should be worked out with both staff and the media before the crisis. 9. Basic and detailed list of media. Creation of a media database. 10. Registration of contacts with the media (who they met, what they said, etc.).

10. Economic cycles - fluctuations in economic activity (economic conditions), consisting of repeated contraction (economic downturn, recession, depression) and expansion of the economy (economic recovery). Cycles are periodic, but usually irregular. Usually (within the framework of neoclassical synthesis) they are interpreted as fluctuations around the long-term trend of economic development.

The deterministic point of view on the causes of economic cycles comes from predictable, well-defined factors that are formed at the stage of recovery (recession factors) and recession (recovery factors). The stochastic point of view comes from the fact that cycles are generated by factors of a random nature and represent a reaction economic system to internal and external impulses.

Types of economic cycles

There are usually four main types of economic cycles:

· short-term Kitchin cycles (characteristic period - 2-3 years);

· medium-term Juglar cycles (characteristic period - 6-13 years);

· Kuznets rhythms (characteristic period - 15-20 years);

· long Kondratiev waves (characteristic period - 50-60 years).

There are four relatively clearly distinguishable phases in business cycles: peak, decline, bottom (or “low point”) and rise; but to the greatest extent these phases are characteristic of Juglar cycles.

Climb occurs after reaching the lowest point of the cycle (bottom). Characterized by a gradual increase in employment and production. Many economists believe that this stage is characterized by low inflation rates. Innovations are being introduced in the economy with a short payback period. The demand deferred during the previous recession is being realized.

Peak, or the top of the business cycle, is the “high point” of an economic expansion. In this phase, unemployment usually reaches its lowest level or disappears completely, production capacities operate at or near maximum load, that is, almost all the material and labor resources available in the country are used in production. Typically, although not always, inflation increases during peaks. The gradual saturation of markets increases competition, which reduces profit margins and increases the average payback period. The need for long-term lending is increasing with a gradual decrease in the ability to repay loans.

Recession(recession) is characterized by a reduction in production volumes and a decrease in business and investment activity. As a result, unemployment increases. Officially, a decline in business activity lasting more than three months in a row is considered a phase of economic decline, or recession.

Bottom(depression) of the business cycle is the “low point” of production and employment. It is believed that this phase of the cycle usually does not last long. However, history also knows exceptions to this rule. The Great Depression of the 1930s, despite periodic fluctuations in business activity, lasted 10 years (1929-1939).

Related information.

FEDERAL AGENCY FOR EDUCATION

Course work on the subject "> on the topic: "Competitive advantages of the company" Checked by ____________________ _____________________ Completed by a student of the group _______ _____________________ CONTENTS INTRODUCTION Today, the competition between firms is moving to a new level, which is not always clear to their management. Too many firms and their top managers They misunderstand the nature of competition and the challenge facing them: they focus on improving financial performance, obtaining government assistance, ensuring stability and reducing risk through alliances and mergers with other firms. The realities of modern competition require leaders. Leaders believe to change, they bring to their organizations the energy needed for constant innovation, they recognize the importance of their home country's position to their firms' competitive success, and they work to improve that position. Most importantly, leaders understand the significance of difficulties and challenges. Because they are willing to help the government make sound - albeit painful - policy decisions and rules, they are often given the title " statesmen “, although few of them consider themselves as such. They are ready to trade a quiet life for difficulties in order to ultimately achieve an advantage over their competitors. The relevance of the research topic is due to the presence of residual phenomena of the economic crisis in the Russian economy, tightening competition, in which, in order to get a client, firms are ready to reduce prices for their products or services, sometimes bringing them to a minimum level. The purpose of the presented research is to expand the theoretical knowledge base on the issue of competitive advantages in order to develop in the future a strategy not only for survival, but also for development for one’s own company. Within the framework of this goal, the following tasks are formulated: - to reveal the meaning of the concept of “competitive advantage”; - consider the types of competitive advantages of the company; - explore several strategies for achieving a firm's competitive advantage. The subject of the study is competitive advantages as a form of economic relations, manifested in the consumer-recognized superiority of a company relative to a direct competitor in any field of activity. The object of the study is the process of forming a sustainable competitive advantage of a company or strategy. The theoretical and methodological basis of the study are the works of leading Russian and foreign scientists devoted to the concept of competitive advantages (G.L. Azoev, M. Porter, A. Yudanov...) 1. THEORETICAL FOUNDATIONS OF COMPETITIVE ADVANTAGES OF A FIRM 1.1 The concept of competitive advantages The specific market position of the organization determines its competitive advantages. In general terms, competitive advantage is superiority in some area that ensures success in the competition. The specific content of the concept of competitive advantage depends, firstly, on the subject of competition, and secondly, on the stage of competition. The competitive struggle, which is a consequence of limited resources, forces us to look for an answer to the question of the patterns of behavior of an economic entity in such conditions, this answer is given by science - economic theory, during this struggle there is a change in the methods of its implementation (policies for achieving competitive advantages, sources of competitive advantages), which is reflected in the evolution of the concept of competitive advantage. Limited resources are manifested at all levels: person, firm, region, country, respectively; the concept of “competitive advantages” can be applied to various subjects of competition1 http://www.dissland.com/catalog/formirovanie_ustoychivogo_konkurentnogo_preimushchestva_na_osnove_intellektualnogo_kapitala.html (access date 10. 01.2011) .

The most complete interpretation of the concept of “competitive advantage” existing in economic research is reflected by the definition of G.L. Azoeva. In accordance with this interpretation, competitive advantages are understood as “concentrated manifestations of superiority over competitors in the economic, technical, organizational areas of an enterprise’s activity, which can be measured by economic indicators (additional profit, higher profitability, market share, sales volume).” According to G.L. Azoev, superiority over competitors in the economic, technical, organizational spheres of an enterprise’s activity is a competitive advantage only if it is reflected in an increase in sales volumes, profits and market share2. Thus, competitive advantage is those characteristics and properties of a product or brand, as well as specific forms of business organization that provide the company with a certain advantage over its competitors. The key success factors influencing competitive advantage include: - technological: high research potential, ability for industrial innovation; - production: full use of production economies of scale and experience, high quality production, optimal use of production capacity, high productivity, necessary production flexibility; - marketing: use of marketing economies of scale and experience, high level of after-sales service, wide product line, powerful sales network, high speed of product delivery, low sales costs; - managerial: the ability to quickly respond to changes in the external environment, the presence of managerial experience; ability to quickly bring a product to the market from the R&D stage; - others: powerful information network, high image, favorable territorial location, access to financial resources, ability to protect intellectual property3. The main task of a company in the field of competition is to create such competitive advantages that would be real, expressive, and significant. Competitive advantages are not permanent; they are won and maintained only through continuous improvement in all areas of the company's activities, which is a labor-intensive and expensive process. 1.2 Types of competitive advantages of a company Let's consider the typologies of competitive advantages of a company. First typology (internal and external competitive advantages) Internal competitive advantage is based on the company's superiority in terms of costs, which allows the cost of manufactured products to be lower than that of competitors. Lower costs give the company an advantage if the products meet the industry average quality standard. Otherwise, a product of poorer quality may be sold through a reduction in its price, which reduces the share of profit. Accordingly, in this embodiment, the cost advantage does not provide benefits. Internal competitive advantage results from high productivity and effective cost management. Relatively low costs provide the company with greater profitability and resistance to lower sales prices imposed by the market or competition. Low costs allow, if necessary, to carry out a pricing dumping policy, setting lower prices in order to increase market share; low costs are also a source of profit that can be reinvested in production to improve product quality, other forms of product differentiation, or used to support other areas of business . In addition, they create effective protection against the five forces of competition (M. Porter). Such as the emergence of new competitors, the possibility of substitute products, the ability of consumers to defend their interests, the ability of suppliers to impose their conditions, competition between long-established firms. Internal competitive advantage is based mainly on a proven production process and effective management of enterprise resources. External competitive advantage is based on the distinctive properties of a product or service that have greater “customer value” for the buyer than similar products of competitors. This allows you to set higher sales prices than competitors that do not provide the corresponding distinctive quality. Any innovation that gives an organization a real increase in its success in the market is a competitive advantage. Organizations achieve competitive advantage by finding new ways to compete in their industry and entering the market with them, which can be called in one word - “innovation”. Innovation in a broad sense includes both the improvement of technology and the improvement of ways and methods of doing business. Innovation can be expressed in a change in the product or production process, new approaches to marketing, new ways of distributing goods, new concepts of competition, etc. The most typical sources of obtaining external competitive advantages include: - new technologies; - changes in the structure and cost of individual elements in the technological chain of production and sale of goods; - new consumer requests; - emergence of a new market segment; - changes in the “rules of the game” in the market. A special source is information about your business plus professional skills that allow you to obtain and process such information so that the final product of processing turns out to be a real competitive advantage. Competitive advantages based on cost alone are generally not as durable as advantages based on differentiation. (Cheap labor refers to the advantage of low rank). Competitive advantages of a higher level or order, such as proprietary technology, differentiation based on unique products or services, an organization's reputation based on enhanced marketing efforts, or close relationships with customers, can be maintained over a longer period of time. Typically, achieving benefits high order becomes possible subject to long-term and intensive capital investments in production capacity, in specialized personnel training, in R&D, as well as investments in marketing. To remain competitive, an organization must create new advantages at least as quickly as its competitors can copy existing ones.4 Second typology (by degree of sustainability) Distinguishes between sustainable and unsustainable competitive advantages Third typology (by sphere of manifestation) By sphere manifestations highlight: - competitive advantages in the field of R&D, expressed in the degree of novelty, the scientific and technical level of applied R&D and R&D, the optimal structure of R&D costs and their economic efficiency, in patent purity and patentability of developments, timeliness of preparation of R&D results for production development, completeness taking into account the conditions of consumption of developed products, the duration of R&D; - competitive advantages in the sphere of production, expressed in accordance with the level of concentration of production and the type of market (high level of concentration in conditions of pure monopoly, monopolistic and oligopolistic competition, low level in conditions of a free competition market), in the use of progressive forms of organization of production (specialization, cooperation, combination ), in the amount of production capacity of the enterprise, in the use of advanced equipment, technology, construction materials, in the high professional and qualification level of labor personnel and scientific organization of labor, the efficiency of use of production resources, the efficiency of design and technological preparation of production and the efficiency of production in general; - competitive advantages in the field of sales, expressed in improved pricing, more efficient distribution of goods and sales promotion, more rational relations with intermediaries, more efficient systems of settlements with consumers; - competitive advantages in the service sector, expressed in more effective pre-sales and after-sales service of products, warranty and post-warranty service. Fourth typology (by type of manifestation) By type of manifestation, it is necessary to distinguish between technical, economic, and managerial competitive advantages: - technical competitive advantages are manifested in superiority in production technology, superiority of technical characteristics of machines and equipment, technological features of raw materials used in production, technical parameters of products ; - economic competitive advantages consist of a more favorable economic-geographical position and a more rational location of the enterprise, greater economic potential of the enterprise, more efficient use of the enterprise’s resources, allowing to reduce the cost of production, better economic characteristics of the products compared to competitors, a better financial condition of the enterprise, making it easier access to credit resources and expanding investment opportunities; - managerial competitive advantages are manifested in more effective implementation of the functions of forecasting, planning, organization, regulation, accounting, control and analysis of production and economic activities. Fifth typology of competitive advantages The following types of competitive advantages are distinguished: 1) competitive advantages based on economic factors; 2) competitive advantages of a structural nature; 3) competitive advantages of a regulatory nature; 4) competitive advantages associated with the development of market infrastructure; 5) competitive advantages of a technological nature; 6) competitive advantages associated with the level of information support; 7) competitive advantages based on geographical factors; 8) competitive advantages based on demographic factors; 9) competitive advantages achieved as a result of actions that violate the law. Competitive advantages based on economic factors are determined by: 1) the best general economic state of the markets in which the enterprise operates, expressed in high industry average profits, long payback periods on investments, favorable price dynamics, high levels of disposable income per capita, the absence of non-payments, and inflationary processes etc.; 2) objective factors stimulating demand: large and growing market capacity, low sensitivity of consumers to price changes, weak cyclicality and seasonality of demand, lack of substitute goods; 3) effect of scale of production. 4) the effect of scale of activity, which manifests itself in the ability to satisfy a wide variety of consumer needs, while setting high prices for the product due to its complex nature; 5) the effect of learning experience, which is expressed in greater labor efficiency due to specialization in types and methods of work, technological innovations in production processes, optimal loading of equipment, more complete use of resources, and the introduction of new product concepts; 6) economic potential of the enterprise. Competitive advantages of a structural nature are determined mainly by the high level of integration of the production and sales process in the company, which makes it possible to realize the advantages of intracorporate connections in the form of internal transfer prices, access to total investment, raw materials, production, innovation and information resources, and a common sales network. Within the framework of integrated structures, potential opportunities are created for concluding anti-competitive agreements and coordinated actions of group members (both horizontal and vertical), including with government authorities. A powerful source of strengthening a company's competitive position is the use of relationships between its various divisions and strategic business areas. The phenomenon when income from the joint use of resources exceeds the amount of income from the separate use of the same resources is called the synergy effect. Structural competitive advantages also include the ability to quickly penetrate unoccupied market segments. Competitive advantages of a regulatory nature are based on legislative and administrative measures, as well as on government incentive policies in the field of investment volumes, credit, tax and customs rates in a certain product area. Such competitive advantages exist due to laws, regulations, privileges and other decisions of government and management authorities. These include: - benefits provided to the region or individual enterprises by government authorities; - the possibility of unhindered import and export of goods outside the administrative-territorial entity (region, territory); - exclusive rights to intellectual property, ensuring a monopoly position for a certain period. Advantages of a regulatory nature differ from others in that they can be eliminated relatively quickly by repealing the relevant legislation. Competitive advantages associated with the development of market infrastructure arise as a result of varying degrees: - development of the necessary means of communication (transport, communications); - organization and openness of labor, capital, investment goods and technology markets; - development of a distribution network, including retail, wholesale, futures trade, services for the provision of consulting, information, leasing and other services; - development of inter-company cooperation. Technological competitive advantages are determined by the high level of applied science and technology in the industry, special technical characteristics machines and equipment, technological features of raw materials and materials used in the production of goods, technical parameters of products. Competitive advantages associated with the level of information support are determined by good awareness and are based on the availability of an extensive data bank about sellers, buyers, advertising activities, and information about the market infrastructure. The absence, insufficiency and unreliability of information becomes a serious obstacle to competition. Specific advantages based on geographical factors are associated with the ability to economically overcome the geographical boundaries of markets (local, regional, national, global), as well as the favorable geographical location of the enterprise. In addition, the geographic barrier to entry for potential competitors into the market is the difficulty of moving goods between territories due to the unavailability of vehicles for transporting goods, significant additional costs for crossing market borders, and loss of quality and consumer properties of goods during their transportation. Demographic-based competitive advantages arise from demographic changes in the target market segment. Factors influencing the volume and structure of demand for the products offered include changes in the size of the target population, its gender and age composition, population migration, as well as changes in the level of education and professional level. Competitive advantages achieved as a result of actions that violate legal norms include: - unfair competition; - directly or indirectly fix sales or purchase prices or any other trading conditions; - restrict or control production, markets, technological development or investment; - share markets or sources of supply; - apply different conditions to identical transactions with other parties, thereby placing them at a disadvantage; - raise the issue of concluding contracts depending on the acceptance by other parties of additional obligations that are not related to the subject of these contracts, etc. 2. STRATEGIES FOR IMPLEMENTING COMPETITIVE ADVANTAGES 2.1 Strategic competitive advantages of the company and ways to implement them in the domestic market The main task in strategic orientation A firm's goal is to select a basic competitive strategy for a specific business area. A competitive strategy must be based on two essential conditions: - it is necessary to determine the strategic goal of the company regarding a given product or service in terms of the scale of competition. - it is necessary to choose the type of competitive advantage. The strategic goal of the company involves targeting the entire market or a specific segment. Basic competitive strategies vary depending on what advantage they rely on. Here it is necessary to decide what type of competitive advantage to give preference to - internal, based on cost reduction, or external, based on the uniqueness of the product; which is easier to defend in a competitive market. The main factors influencing competitive advantage include: - technological: high research potential, ability for industrial innovation; - production: full use of production economies of scale and experience, high quality production, optimal use of production capacity, high productivity, necessary production flexibility; - marketing: use of marketing economies of scale and experience, high level of after-sales service, wide product line, powerful sales network, high speed of product delivery, low sales costs; managerial: ability to quickly respond to changes in the external environment, availability of managerial experience; ability to quickly bring a product to the market from the R&D stage; - others: powerful information network, high image, favorable territorial location, access to financial resources, ability to protect intellectual property. Basic competitive strategies include: - cost leadership strategy; - differentiation strategy; - focusing strategy. Cost leadership strategy When choosing a cost leadership strategy, a company addresses the entire market with the same product, neglecting differences in segments, trying as much as possible to reduce the cost of manufacturing products. It targets a wide market and produces goods in large quantities. At the same time, the company focuses its attention and efforts not on how the needs of individual consumer groups differ, but on what these needs have in common. In addition, this strategy provides the widest possible boundaries of the potential market. The focus of the entire strategy is to create internal competitive advantage, which can be achieved through higher productivity and effective cost management. The company's goal in this case is related to the use of cost superiority as the basis for increasing market share through price leadership or generating additional profits. Leadership due to the advantage of lower costs than competitors gives the company the opportunity to resist its direct competitors even in the event of a price war. Low costs are a high barrier to entry for potential competitors and a good defense against substitute products. The main factors of superiority in costs include: the use of advantages due to the effects of scale and experience; - control over fixed costs; - high technological level of production; - stronger staff motivation; - privileged access to sources of raw materials. As a rule, these advantages manifest themselves in the manufacture of standard products of mass demand, when the possibilities of differentiation are limited and demand is price elastic, and the likelihood of consumers switching to others is high. The cost minimization strategy has disadvantages. Cost reduction techniques can be easily copied by competitors; technological breakthroughs can neutralize existing internal competitive advantages associated with accumulated experience; due to an excessive focus on cost reduction - insufficient attention to changes in market requirements, a decrease in product quality is possible. This strategy is aggressive and is most easily implemented when the enterprise has access to exclusive, low-cost resources. Strategy of differentiation by segments (classes) of manufactured goods The main goal of each differentiation strategy is to give the product or service properties that are distinctive from similar competing goods or services, which create “customer value” associated with the advantage of the product, time, place, service. Customer value is the utility or overall satisfaction they receive from using a product, as well as the minimal operating costs over its life. The main point of the differentiation strategy is understanding the needs of customers. In this case, we can say that with a certain set of qualities of an exclusive product or service, the company creates a permanent group of buyers in a specific market segment, i.e. almost a mini-monopoly. Unlike cost leadership strategy, which can only be achieved through an efficient cost structure, differentiation can be achieved in a variety of ways. The main approaches used in the differentiation strategy include: - development of such product characteristics that reduce the buyer’s total costs of operating the manufacturer’s products (increased reliability, quality, energy saving, environmental friendliness); - creation of product features that increase the effectiveness of its use by the consumer (additional functions, complementarity with another product, interchangeability); - giving the product features that increase the level of customer satisfaction (status, image, lifestyle). Based on the nature of the focus, innovation and marketing differentiation strategies can be distinguished. Innovative differentiation An innovative differentiation strategy is a real differentiation associated with the production of truly different products using different technologies. This strategy involves acquiring competitive advantages through the creation of fundamentally new products, technologies or upgrades and modifications of existing products. In this case, differentiation affects not only the product itself, but also the technology being implemented, which requires taking into account the factor of scientific and technological progress. Scientific discoveries and evolving technologies offer new ways to meet consumer needs. Real differentiation is more characteristic of the market for industrial goods and products of high-tech industries, where the largest gap in competition is determined by an effective innovation strategy. Marketing differentiation A marketing differentiation strategy involves achieving competitive advantages by creating distinctive properties associated not with the product itself, but with its price, packaging, delivery methods (without prepayment, with the provision of transport, etc.); placement, promotion, after-sales service (warranties, service), a trademark that creates an image. The presence of distinctive qualities usually requires higher costs, which leads to higher prices. However, successful differentiation allows a firm to achieve greater profitability because consumers are willing to pay for product uniqueness. Differentiation strategies require significant investments in functional marketing and, especially, in advertising in order to convey to consumers information about the claimed distinctive features of the product. Focus strategy A focus (specialization) strategy is a typical business strategy that involves concentrating on a narrow market segment or a specific group of customers, as well as specializing in a certain part of the product and/or geographic region. Here, the main goal is to meet the needs of the selected segment with greater efficiency in comparison with competitors serving a wider market segment. A successful focus strategy achieves a high market share in the target segment, but always leads to a low market share in the overall market. This strategy is the preferred development option for firms with limited resources. A focus strategy takes the form of a focused low-cost strategy if the segment's buyers' price requirements for the product differ from those of the primary market, or a focused differentiation strategy if the target segment requires unique product characteristics. Like other basic business strategies, a focus strategy protects a firm from competitive forces in the following ways: focusing on a segment allows it to compete successfully with firms operating in different segments; the firm's specific competencies and capabilities create barriers to entry for potential competitors and the penetration of substitute products; pressure from buyers and suppliers is reduced due to their own reluctance to deal with other, less competent competitors. The reason for choosing such a strategy is the lack or lack of resources, strengthening barriers to entry into the market. Therefore, the focusing strategy is, as a rule, inherent in small companies5 http://www.logistics.ru/9/2/i20_64.htm (accessed January 15, 2011). 2.2 Problems of realizing competitive advantages in the international market Everything that was said above about competition and competitive strategy can equally apply to both foreign and domestic markets. At the same time, international competition has some peculiarities. Feature one Each country, to one degree or another, possesses the factors of production necessary for the activities of firms in any industry. The theory of comparative advantage in the Heckscher-Ohlin model is devoted to the comparison of available factors. The country exports goods in the production of which intensively use various factors. However, factors, as a rule, are not only inherited, but also created, therefore, in order to obtain and develop competitive advantages, it is not so much the stock of factors at the moment that is important, but the speed of their creation. In addition, an abundance of factors can undermine competitive advantage, while a lack of factors can encourage renewal, which can lead to long-term competitive advantage. The combination of factors used differs in different industries. Firms achieve competitive advantage when they have low-cost or high-quality inputs that are important when competing in a particular industry. Thus, Singapore's location on an important trade route between Japan and the Middle East made it the center of the ship repair industry. However, gaining a competitive advantage based on factors depends not so much on their availability as on their effective use, since MNCs can provide missing factors by purchasing or locating operations abroad, and many factors move relatively easily from country to country. Factors are divided into basic and developed. The main factors include Natural resources, climatic conditions, geographical position , unskilled labor, etc. The country receives them by inheritance or with minor investments. They are not particularly important for a country's competitive advantage, or the advantage they create is unsustainable. The role of the main factors is reduced due to a reduction in the need for them or due to their increased availability (including as a result of the transfer of activities or procurement abroad). These factors are important in extractive industries and agriculture-related industries. Developed factors include modern infrastructure, highly qualified workforce, etc. It is these factors that are most important, as they allow you to achieve a higher level of competitive advantage. Feature two The second determinant of national competitive advantage is the demand in the domestic market for goods or services offered by this industry. By influencing economies of scale, demand in the domestic market determines the nature and speed of innovation. The volume and nature of growth in domestic demand allow firms to gain a competitive advantage if: - there is demand abroad for a product that is in great demand in the domestic market; - there are a large number of independent buyers, which creates a more favorable environment for renewal; - domestic demand is growing rapidly, which stimulates the intensification of capital investment and the speed of renewal; - the domestic market is quickly becoming saturated, as a result, competition is becoming tougher, in which the strongest survive, which forces them to enter the foreign market. Firms achieve competitive advantage by internationalizing demand in the domestic market, i.e. when preference is given to foreign consumers. Feature Three The third determinant that determines a national competitive advantage is the presence in the country of supplier industries or related industries that are competitive in the world market. In the presence of competitive supplying industries, the following are possible: - effective and quick access to expensive resources, for example, equipment or skilled labor, etc.; - coordination of suppliers in the domestic market; - assisting the innovation process. National firms benefit most when their suppliers are globally competitive. The presence of competitive related industries in a country often leads to the emergence of new highly developed types of production. Related industries are those in which firms can interact with each other in the process of forming a value chain, as well as industries that deal with complementary products, such as computers and software. Interaction can occur in the field of technology development, production, marketing, and service. If there are related industries in the country that can compete in the world market, access to information exchange and technical cooperation opens up. Geographical proximity and cultural kinship lead to more active exchanges than with foreign firms. Success in the global market of one industry may lead to the development of the production of additional goods and services. For example, the sale of American computers abroad has led to increased demand for American peripherals, software, and the development of American database services. Feature Four The fourth important determinant of industry competitiveness is the fact that firms are created, organized and managed depending on the nature of competition in the domestic market, with different strategies and goals being developed. National characteristics influence the management of firms and the form of competition between them. In Italy, many companies that successfully operate in the global market are small or medium-sized (in size) family businesses. In Germany, large companies with a hierarchical management system are more common. In addition, we can recall the American and Japanese control systems. These national characteristics significantly influence the positions of firms when targeting global competition. Of particular importance for achieving high competitiveness in the industry is strong competition in the domestic market; competition in the domestic market creates advantages for the national industry as a whole, and not just for individual firms. Competitors borrow progressive ideas from each other and develop them, since ideas spread faster within one nation than between different nations. These advantages are enhanced when competitors are concentrated in one geographic area. The role of the government The role of the government in the formation of national advantages lies in the fact that it influences all four determinants: - on the parameters of factors - through subsidies, capital market policies, etc.; - on demand parameters - by establishing various standards and carrying out public procurement; - on the conditions for the development of related industries and supplier industries - through control over advertising media or regulation of infrastructure development; - on the strategy of firms, their structure and competition - through their tax policy, antitrust legislation, by regulating investments and the activities of the securities market, etc. All four determinants can also have the opposite effect on government. The role of government can be positive or negative. The determinants of national competitiveness are a complex system that is in constant development. Some determinants regularly influence others. The action of the system of determinants leads to the fact that competitive national industries are not distributed evenly throughout the economy, but are connected in bundles, or “clusters,” consisting of industries that depend on each other. 2.3 Benchmarking as a strategy for achieving competitive advantage6 http://www.support17.com/component/content/296.html?task=view (accessed January 12, 2011) The term “benchmarking” comes from English word benchmark (bench- place, to mark- mark), is a way of studying the activities of business entities, primarily their competitors, with the aim of using positive experience in their work. Benchmarking includes a set of tools that allow you to systematically find, evaluate and organize the use of all the positive advantages of other people's experience in your work. Benchmarking is based on the idea of ​​comparing the activities of not only competing enterprises, but also leading firms in other industries. Proper use of the experience of competitors and successful companies allows you to reduce costs, increase profits and optimize the choice of strategy for your organization. Benchmarking is a constant study of the best practices of competitors, comparing a company with a created reference model of its own business. Benchmarking allows you to identify and use in your business what others do better. Benchmarking is based on the concept of continuous performance improvement, which involves a continuous cycle of planning, coordinating, motivating and evaluating actions with the goal of sustainable improvement of the organization's performance. The core of benchmarking is finding the best business standards for use by the research organization. It focuses not on simply measuring and comparing achievements, but on how any given process can be improved by applying best practices. Benchmarking requires a company to be humble enough to accept that someone else may be better at something, and wise enough to try to learn how to catch up and even surpass others' achievements. Benchmarking reflects an organization's continuous improvement efforts and helps integrate disparate improvements into unified system change management. Types of benchmarking - internal - comparison of the work of company departments; - competitive - comparison of your enterprise with competitors according to various parameters; - general - comparison of the company with indirect competitors according to selected parameters; - functional - comparison by function (sales, purchasing, production, etc.). General benchmarking is a comparison of the production and sales performance of one’s products with the business performance of a sufficiently large number of producers or sellers of a similar product. Such a comparison allows us to outline clear directions for investment activity. The parameters used to compare product characteristics depend on the specific type of product. Functional benchmarking means comparing the performance parameters of individual functions (for example, operations, processes, work methods, etc.) of a seller with similar parameters of the best enterprises (sellers) operating in similar conditions. Competitive benchmarking examines the products, services, and processes of an organization's direct competitors. Benchmarking is close to the concept of marketing intelligence, which means the constant activity of collecting current information about changes external environment marketing, necessary for both the development and adjustment of marketing plans. However, marketing intelligence aims to collect confidential information, and benchmarking can be seen as the activity of thinking about strategy based on best experience partners and competitors. F. Kotler identifies benchmarking with basic analysis - the process of “searching, studying and mastering the most advanced practices and technologies used by organizations in various countries around the world, with the goal of making your organization more effective.” Benchmarking is becoming a powerful lever for enhancing a company's competitiveness and the art of understanding how and why some companies achieve significantly better results than others. Benchmarking can help you improve best technologies other companies, i.e. it is aimed at mastering “the most advanced world experience.” CONCLUSION In conditions of fierce competition and a rapidly changing situation, firms must not only focus on the internal state of affairs, but also develop a long-term strategy aimed at creating sustainable competitive advantages. Accelerating change in environment, the emergence of new requests and changes in consumer positions, changes in government policy, and the entry of new competitors into the market leads to the need for constant analysis and optimization of existing competitive advantages. The most significant or long-term competitive advantage, in my opinion, is given to a company by the introduction of new technology or “know-how” created by the company itself through innovation. Not every company can create this competitive advantage (the main problem is the lack of sufficient financial and human resources). From the study we can conclude that there is no competitive advantage that is uniform for all companies. Each company is unique in its own way, therefore the process of creating competitive advantages for each company is unique, since it depends on many factors: the company’s position in the market, the dynamics of its development, potential, the behavior of competitors, the characteristics of the goods produced or services provided, the state of the economy , cultural environment and many other factors. At the same time, there are some fundamental points and strategies that allow us to talk about general principles of competitive behavior and implementation strategic planning aimed at creating a sustainable competitive advantage. REFERENCES 1. Azoev G.L., Chelenkov A.P. Competitive advantages of the company. - M.: JSC Printing House NEWS, 2007. 2. Benchmarketing [Electronic resource] 3. Golovikhin S.A., Shipilova S.M. Theoretical basis determining the competitive advantages of a machine-building enterprise 4. Zakharov A.N., Zokin A.A., Competitiveness of an enterprise: essence, methods of assessment and mechanisms of increase 5. Porter M. “International competition”: trans. from English: ed. V.D. Shchetinina. M.: International relations, 1993 6. Fatkhutdinov R.A. Strategic management. 7th ed., rev. and additional - M.: Delo, 2005. - 448 p. 7. Shifrin M.B. Strategic management. - St. Petersburg: Peter, 2008, p. 113 8. Yagafarova E. F. Abstract of dissertation research on the topic “The role of intellectual capital in the formation of a sustainable competitive advantage of a company”

1. Yagafarova E. F. Abstract of dissertation research on the topic "The role of intellectual capital in the formation of a sustainable competitive advantage of a company" [Electronic resource] URL:
2. S.A. Golovikhin, S.M. Shipilova. Theoretical foundations for determining the competitive advantages of a machine-building enterprise [Electronic resource] URL: http://www.lib.csu.ru/vch/8/2004_01/023.pdf (access date 12/18/2010)
3. Shifrin M.B. Strategic management. - St. Petersburg: Peter, 2008, p. 113
4. Azoev G.L., Chelenkov A.P. Competitive advantages of the company. - M.: JSC “Printing house “NEWS”, 2007.
5. A.N. Zakharov, A.A. Zokin, Competitiveness of an enterprise: essence, methods of assessment and mechanisms for increasing [Electronic resource] URL:

The competitive advantages of a product are its consumer or technical and economic parameters that affect its position in the market.

There are several types of competitive advantages of a product:

1. Price characteristics of the product. Very often, a buyer purchases a product only because it is cheaper than other products that have similar consumer properties. Sometimes a product is purchased only because it is very cheap. Such purchases can occur even if the product has no consumer utility for the buyer.

2. Product differentiation - a product has distinctive features that make it attractive to the buyer. Differentiation is entirely related to the consumer (utilitarian) qualities of the product (reliability, ease of use, good functional characteristics etc.), and can also be achieved through recognition of a famous brand.

3. Monopolization - the competitive advantage of a product, which lies in its position in the market. This is achieved by securing the buyer, by monopolizing part of the market.

An organization's competitive advantage is the lasting benefit of applying some unique strategy that creates customer value, based on a unique combination of internal resources that cannot be copied by competitors.

There are two types of competitive advantages of an organization: a) low costs and b) specialization.

Lower costs refers to lower production costs than competitors, as well as the company's ability to develop, produce and sell a product more efficiently than its competitors. Specialization is the concentration on the production of only a certain range of goods, investing in their improvement, the ability to satisfy the special needs of customers and receive a premium price for this, i.e. the price is on average higher than that of competitors.

The competitiveness of a product is a complex of its consumer and cost (price) characteristics that determine the success of the product in the market, i.e. the advantage of this particular product over other competing analogue products offered.

The competitiveness of a product is a decisive factor in its commercial success. Competitiveness is a complex concept; it includes the compliance of the product with market conditions; compliance of the product with the specific requirements and demands of consumers (in terms of quality, technical, aesthetic, economic parameters), an advantage over competitors in terms of price and quality of the product.

The competitive advantages of the product include:

1. Functionality - the purpose of the product. The presence of not one, but several functions - multifunctionality - is an advantage over other analogue products.

2. Unification - compatibility with spare parts, consumables, software of other models.

3. Standardization - the presence of standard components and parts, which simplifies their replacement and repair.

4. Reliability is a complex indicator that includes 3 parameters:

a) reliability (average operating time in hours before the first failure)

b) durability (service life)

c) maintainability - the ability to eliminate faults (however, many cheap products are designed as non-repairable).

5. Energy performance (fuel or energy efficiency). In addition to the acquisition cost, the buyer can evaluate the cost of consumption - this is the sum of operating costs over the entire service life of the product. Therefore, other than that equal conditions the buyer will choose a more economical product.

6. Aesthetic indicators.

7. Transportability.

8. Packaging (its convenience and design).

9. Warranty service (warranty period, list of warranty work, proximity to a service point).

10. Availability of related products (consumables, batteries, etc.).

11. The presence of substitute goods reduces the competitiveness of the product, because Price competition may occur between goods of different groups, but which are substitutes.

12. The presence of complementary goods increases competitiveness, because this stimulates demand for the main product (for example, coffee and cream, beer and roach).