Brand Image and

Competitive Advantage
through Strategies
“Competitive
strategy is about
being different. It
means deliberately
choosing to
perform activities
differently or to
perform different
activities than rivals
to deliver a unique
mix of value.”
Michael E. Porter

2
 Definition

• Competitive Advantage
– An advantage over
competitors gained by
offering consumers
greater value than
competitors offer.

3
 Competitive
Strategies
• How does an organisation
improve their competitive
performance?
• Must establish a competitive
advantage in 3 areas:
– Uniqueness: of resources &
processes (Bill Gates
knowledge of IBM)
– Value: where
products/services warrant a
higher-than-average price or
exceptionally low
– Difficult to imitate: when
products/services are hard to
mimic or duplicate

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 • Basic Competitive
Strategies: Porter
– Overall cost leadership
• Lowest production and
distribution costs
Competitive – Differentiation
Strategies • Creating a highly
differentiated product line
and marketing program
– Focus
• Effort is focused on
serving a few market
segments

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 Competitive Strategies
• Basic Competitive Strategies: Value Disciplines
– Operational excellence
• Superior value via price and convenience
– Customer intimacy
• Superior value by means of building strong

relationships with buyers and satisfying

needs
– Product leadership
• Superior value via product innovation
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CORE COMPETENCES

Definition
Hammel and Prahalad
defined core competence as
a central value - creating
capability of an
organization/enterprise.
 CORE COMPETENCES
• Core competences are activities or
processes that critically underpin an
organisation competitive advantage.

• They create and sustain the ability to

meet the critical success factors of
particular customer groups better than
providers in ways that are difficult to
imitate
CORE COMPETENCES

• Core competences are

distinctive capabilities that lead
a company to a competitive
advantage.

• Features of an enterprise that

cannot be readily reproduced
by a competitor.
CORE COMPETENCES

Core competences can vary

through the time depending on
the strategy adapted by the
companies and the identification
of the core competencies is the
first step for a company to
decide which business
opportunities to pursue.
The Five Generic Competitive
Strategies

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 Low-Cost Provider Strategies
Keys to Success
• Make achievement of meaningful lower
costs than rivals the theme of firm’s strategy

• Include features and services in product

offering that buyers consider essential

• Find approaches to achieve a cost

advantage
in ways difficult for rivals to copy or match
Low-cost leadership means low overall costs, not
just low manufacturing or production costs! 12
 Differentiation Strategies
Objective
• Incorporate differentiating features that cause
buyers to prefer firm’s product over brands of
rivals
Keys to Success

• Find ways to differentiate that create value for

buyers and are not easily matched or cheaply
copied by rivals
• Not spending more to achieve differentiation
than the price premium that can be charged13
 Where to Find Differentiation
Opportunities in the Value Chain
• Purchasing and procurement activities
• Product R&D and product design activities
• Production process / technology-related
activities
• Manufacturing / production activities
• Distribution-related activities
• Marketing, sales, and customer service activities

Internally Activities, Costs,

Activities,
Performed & Margins of Buyer/User
Costs, &
Activities, Forward Channel Value
Margins of
Costs, & Allies & Chains
Suppliers 14
Margins Strategic Partners
 How to Achieve a
Differentiation-Based Advantage
Approach 1
Incorporate product features/attributes that
lower buyer’s overall costs of using product
Approach 2
Incorporate features/attributes that raise the
performance a buyer gets out of the product
Approach 3
Incorporate features/attributes that enhance buyer
satisfaction in non-economic or intangible ways
Approach 4
Compete on the basis of superior capabilities15
Types of Differentiation Themes
• Unique taste – Dr. Pepper
• Multiple features – Microsoft Windows and Office
• Wide selection and one-stop shopping – Home
Depot, Amazon.com
• Superior service -- FedEx, Ritz-Carlton
• Spare parts availability – Caterpillar
• Engineering design and performance – Mercedes,
BMW
• Prestige – Rolex
• Product reliability – Johnson & Johnson
• Quality manufacture – Michelin, Toyota
• Technological leadership – 3M Corporation
• Top-of-line image – Ralph Lauren, Starbucks, Chanel
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 Sustaining Differentiation:
Keys to Competitive Advantage
• Most appealing approaches to differentiation
– Those hardest for rivals to match or imitate
– Those buyers will find most appealing
• Best choices to gain a longer-lasting, more profitable
competitive edge
– New product innovation
– Technical superiority
– Product quality and reliability
– Comprehensive customer service
– Unique competitive capabilities 17
 Best-Cost Provider Strategies
• Combine a strategic emphasis on low-cost with a
strategic emphasis on differentiation
– Make an upscale product at a lower cost
– Give customers more value for the money
Objectives
• Deliver superior value by meeting or exceeding
buyer expectations on product attributes and
beating their price expectations
• Be the low-cost provider of a product with good-to-
excellent product attributes, then use cost
advantage to under price comparable brands 18
 Focus / Niche Strategies
• Involve concentrated attention on a narrow piece of
the total market
– Objective
Serve niche buyers better than rivals

Keys to Success
• Choose a market niche where buyers have
distinctive preferences, special requirements, or
unique needs
• Develop unique capabilities to serve needs of target
buyer segment 19
Examples of Focus Strategies
• Animal Planet and History Channel
– Cable TV
• Google
– Internet search engines
• Porsche
– Sports cars
• Cannondale
– Top-of-the line mountain bikes
• Enterprise Rent-a-Car
– Provides rental cars to repair garage customers
• Bandag
– Specialist in truck tire recapping
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 Focus / Niche Strategies
and Competitive Advantage
Approach 1
• Achieve lower costs than rivals in
serving a well-defined buyer segment –
Focused low-cost strategy
Approach 2
Which

• Offer a product appealing to unique hat is

unique?

preferences of a well-defined buyer

segment – Focused differentiation
strategy 21
How Important is Branding?
• The NUMMI plant in California produces
two nearly identical models called the
Toyota Corolla and the Chevrolet Prizm.

• Toyota sold 230,000 Corollas compared

to sales of 52,000 Prizms.

• And Toyota’s net price is $650 higher!

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 A Strong Brand Improves
Demand and Supply
• On the demand side:
– higher price
– increased sales volume
– lower churn
– more brand stretching

• On the supply side:

– greater trade acceptance, more favorable supplier
terms, lower rejection
– lower staff acquisition and retention costs
– lower cost of capital
– better scale economics through higher volume 23
Names are Important in Branding
· Donald Trump’s family name is Drumpf. But
he can’t call it Drumpf Towers.

· Alan Alda’s name was Alphonso D’Abruzzo.

· Chinese gooseberry was renamed kiwifruit.

· Paradise Island in the Bahamas used to be

Hog Island.
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 A Brand Must be More
Than a Name
• A brand must trigger words or associations (features and
benefits).

• A brand should depict a process (McDonald’s, Amazon).

• A great brand triggers emotions (Harley-Davidson).

• A great brand represents a promise of value (Sony).

• The ultimate brand builders are your employees and

operations, i.e., your performance, not your marketing
communications.
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 Your Company’s Brand
1. What word does your brand own?

2. Write down other words triggered by your brand name?

A. Circle the favorable words; square the unfavorable words.

B. Underline the words that are favorable but not widely known.
C. Double underline the words that are unique to your company.

3. Are any of the following a source for strengthening your brand’s

personality?

A. Founders
B. Spokespersons
C. Characters
D. Objects
E. Stories and mythologies
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 How Do You Develop a Brand
Concept?
• “The brand must be an essence, an ideal, an
emotion. ” It must be supported by beautiful
logos, clever tag lines, creative turns, edgy
names, rave launch parties, big ticket giveaway
promotions, and publicity buzz-making.
(Advertising agency view)

• “The brand should have a target group in mind

and be positioned to solve one of their
problems better than competitive offerings.”
Furthermore the brand’s reputation is
ultimately based on product quality, customer
satisfaction, employee communications, social
responsibility, etc. (Kevin Clancy, CEO of 27
Copernicus)
Branding Components
• Name
– Short, suggestive, memorable, unique,
pronounceable
• Slogan
• Logo and typeface
• Colors
• Music
• Taglines/themelines (Got Milk!)
• Stationery and business cards
• Offices
• Trucks
• Dress code 28
 Brand Slogans
• BA, “The World’s Favorite Airline”
• American Express, “The Natural Choice”
• AT&T, “The Right Choice”
• Budweiser, “King of Beers”
• Ford, “Quality is #1 Job”
• Holiday Inn, “No Surprises”
• Lloyds Bank, “The Bank that Likes to Say Yes”
• Philips,
– “From Sand to Chips”
– “Philips Invents for You”
– “Let’s Make Things Better”

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 Design the Marketing
From the Customer-Back
• Marketing must be run as a set of value finding, creation, and
delivery processes, not 4P functions. The four Ps are seller
oriented.

• The 4As are buyer oriented.

– Awareness (A1)
– Acceptability (A2)
– Affordability (A3)
– Accessibility (A4)

• Market value potential = A1 x A2 x A3 x A4

– If A1=100%, A2=100%, A3=50%, A4=50%, Then MV=25%

Source: Jagdish Sheth 30

 Sources
• https://www.jagsheth.com/books/the-4-as-of-marketin
g/

• https://hbr.org/1996/11/what-is-strategy

• https://www.forbes.com/sites/theyec/2021/03/09/five-
components-of-a-strong-brand/

• Adapted from World Intellectual Property

Organisation Lecture on Competitive Advantage
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