Overview
This lecture covers the four main macro strategies companies use to develop a sustainable competitive advantage in marketing, focusing on creating customer value that competitors find difficult to duplicate.
Sustainable Competitive Advantage
- A sustainable competitive advantage allows a company to serve its target market in ways that are hard for competitors to replicate.
- Four main macro strategies for customer value are: customer excellence, operational excellence, product excellence, and locational excellence.
Customer Excellence
- Customer excellence is achieved through outstanding customer service leading to high customer loyalty.
- Example: USAA targets military members and families, offering superior service that is hard for competitors to match.
Operational Excellence
- Operational excellence involves efficient operations, supply chain management, and supplier relationships, resulting in low operating costs.
- Example: Walmart excels through operational efficiency, enabling low prices, while Amazon is a close competitor.
Product Excellence
- Product excellence is when consumers value and pay more for a strong, recognizable brand.
- Examples: Nike, Apple, Coke, Tiffany & Co. have brands that customers trust and prefer over competitors' products.
Locational Excellence
- Locational excellence means being in the best physical locations to serve customers conveniently.
- Example: McDonald’s is known for strategic locations, making it highly accessible.
Combining Strategies
- Companies benefit most when they combine multiple sources of advantage (e.g., good service and efficient operations).
- Example: Southwest Airlines combines service and operational efficiency.
Key Terms & Definitions
- Sustainable Competitive Advantage — a unique value that is difficult for competitors to duplicate.
- Customer Excellence — exceptional customer service that retains loyalty.
- Operational Excellence — superior efficiency in operations and supply chains.
- Product Excellence — strong brand reputation that adds value.
- Locational Excellence — prime locations that maximize convenience for customers.
Action Items / Next Steps
- Review examples of each macro strategy for Exam 1.
- Prepare to discuss the structure of a marketing plan in the next class.