Competitive Advantage Approaches (Inside Out and Outside in)

2341 words 10 pages
“Focusing on gaining a sustainable competitive advantage is a dangerous approach to planning and more likely to lead to failure than success”

The debate continues in distinguishing the most preeminent way of seeking a sustainable competitive advantage. The two approaches formed by the debate ― the positioning approach and the resource-based approach: have become apparent strategies of attaining and sustaining a competitive advantage (Barney, 1991; Porter, 1996). Regardless of the approach, attaining both customer- value and product differentiation are the two determinants of a successful business strategy (Barney, 1991; Porter, 1996; Woodcruff, 1997). The positioning approach, often referred to as the “outside-in”
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Companies that use a Focus strategy concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it. They either develop Leadership-Cost or Differentiation, because they serve customers in their market uniquely well that they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors (Porter, 1980). Porter’s strategies can therefore be dangerous if planning cycles within an organisation lack behind the changing external environment. As long as organisations are constantly observing changing external conditions, this approach may be successful, along with the modifications to follow (Porter, 1980; Porter, 1985; Porter, 1996).
Best Cost Provider
There have been a number of adaptations of the generic strategies; this approach to customer value accentuates the combination of Porter’s Cost-Leadership and Differentiation, to aim at giving customer value for money (Baroto, Abdulla & Wan, 2012). It stresses that success is dependent on an organisations capabilities and skills to provide eye-catching features at a lower cost than competitors, outperforming others who just focus on just cost or differentiation. It suggests that predominantly buyers are price and value sensitive Baroto, Abdulla & Wan, 2012).
Strategy Clock
Cliff Bowman developed the “Strategy Clock” variation to Porter’s


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