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An excellent marketing strategy is able to find a way for achieving an advantage over competitors in the same field of operation. A competitive advantage is the one that is gained by a firm over its competitors. This can be achieved by offering of greater value to consumers with the help of the provision of low priced commodities or by offering specific benefits to the consumers.
A firm with competitive advantage is able to sustain profits that are above the average level of other firms in the same industry. Such competitive advantage must be sustainable. A competitive advantage should also be unique and relevant to the industry (Stone, 22).
It is important for a firm to have one or more sources of competitive advantage so that there is an increase in stakeholder and shareholder value. It is also a way of attracting investors to the firm since the investors search for a company that has the highest chances of outperforming its peers. With increased investment in a firm, expansion occurs.
This enables the firm to grow at a higher rate. Since competitive advantage comes with low prices for goods and services or the provision of benefits that justify high prices, a firm is able to acquire the loyalty of a large customer base. The revenue of the firm also increases because of the competitive advantage (Wimmer, 23).
For a firm in the pharmaceutical industry, some key sources for competitive advantage include innovation, cost advantage and brand equity. Innovation is an important factor to a pharmaceutical organization that wishes to outperform its rivals.
This process should be progressive to enable the firm to stay ahead of competition by providing unique and innovative products to the consumers. This includes the provision of new pharmaceutical products as well as the re-designing of the outdated ones. A firm that chooses to use innovation as its source of competitive advantage must also beware of technological advancements.
With the fast changing technological landscape, most technologies, ideas and procedures may become obsolete hence creating the need to innovate something new. Such a firm may need to re-invent itself from time to time in order to maintain its competitive advantage (Moingeon and Edmondson, 12).
When a pharmaceutical firm has a technology, a machine or a process that enables it to produce a specific product at a lower cost than its rivals, it may acquire competitive advantage. This may be achieved if the competitors are not able to acquire a similar technology or machine. However, pharmaceutical firms can patent their unique inventions and procedures hence enabling them to enjoy the benefit of this source of competitive advantage.
Having a strong and reputable brand is also a source of competitive advantage for a pharmaceutical firm. This happens due to the fact that a brand can win the preference and loyalty of customers. While making an evaluation of a brand’s equity, reference should also be made to other brands available in the market to ensure that this specific brand is the strongest one. In such case, brand equity may be a source of competitive advantage.
Having a competitive advantage now is more important for a firm than it has been twenty five years ago because of the increase of competitors in the industries. Firms that have enjoyed monopoly twenty years ago cannot afford that luxury now due to the emergence of modern competitors. Therefore, with increased competition, it is important for the companies to have competitive advantage.
Works Cited
Moingeon, Bertrand, and Amy C. Edmondson. Organizational Learning and Competitive Advantage. London: Sage Publications, 1996. Print.
Stone, Phil. Make Marketing Work for You: Boost Your Profits with Proven Marketing Techniques. Oxford: How To Books, 2001. Print.
Wimmer, Wolfgang. Ecodesign– the Competitive Advantage. Dordrecht: Springer, 2010. Print.
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