Logistics and Competitive

strategy
Competitive Advantage
A competitive advantage is an advantage over
competitors gained by offering consumers greater
value, either by means of lower prices or by providing
greater benefits and service that justifies higher prices.
Competitive Advantage
Firms can achieve competitive advantage through:
• Differentiation, in the eyes of the customer, from its
competition
And
• By operating at a lower cost and hence at greater profit.
Logistics and competitive advantage
• A position of enduring superiority over competitors in terms
of customer preference may be achieved through logistics.
• Successful companies either have productivity advantage or
they have a ‘value’ advantage or a combination of the two.
Productivity advantage
There is substantial evidence to suggest that big is
beautiful when it comes to cost advantage. This is
partly due:
• to economies of scale
• to the impact of the "Experience Curve".
Value advantage
• Customers don’t buy products, they buy benefits,
these benefits may be intangible (image or
reputation)
In other words
• Products are purchased for the promise of what they
will “deliver”.
Value advantage
• Adding value through differentiation is a powerful
means of achieving a defensible advantage in the
market.
But How it could be achieved?
1. Value segments approach
2. Services augmented offers
Productivity and Value advantage
Successful companies will often seek both productivity
and a value advantage. Available options are:
 The changing logistics environment

• The customer service explosion (Services excellence, appropriate delivery systems, committed
employees)
• Time compression (logistics lead time)
ORDER CASH
• Globalization of industry (offshore)
• Organizational integration (Material, production, and marketing managers)
• To achieve the goal of competitive advantage through both cost reduction and service enhancement.
• Organizations need to accelerate the movement through the supply chain and to have more flexible
Logistics systems and this could be achieved through:
• Cutting short the pipeline (Unneeded inventory)
• - Improve the pipeline visibility (Organizational barriers removals, better coordination)
• - Managing logistics as a system