Winning the Business Game: Competitive Advantage

Winning the Business Game: Competitive Advantage

The processes businesses use to create and maintain competitive advantage Year 9 Commerce NSW Curriculum

Hook Scenario: Four Cafés in Dulwich Hill

Café A: Cheapest coffee ($3.50) Café B: TikTok-famous desserts Café C: Vegan and gluten-free only Café D: Fastest service near the station Discussion: Which café would survive long-term? Why?

Link to Last Lesson

Last lesson: Competition Competition = businesses trying to win the same customers Today: How businesses create and maintain competitive advantage Competitive advantage = the reason customers choose one business instead of another

WALT (We Are Learning To) & Success Criteria

WALT: Understand the processes businesses use to create and maintain competitive advantage I can define competitive advantage I can explain Porter's three competitive strategies I can identify business processes that create advantage I can explain how businesses maintain advantage over time I can apply this to real businesses I can evaluate whether an advantage is effective, sustainable and ethical

Big Idea

Competitive advantage does not happen by accident. Businesses usually follow a process: 1. Understand customers and competitors 2. Choose a competitive strategy 3. Create the advantage 4. Maintain the advantage 5. Evaluate and improve

The Competitive Advantage Process

Step 1: Research Customers

What customers want and need What customers are willing to pay What problems customers have What trends are popular What customers value: price, quality, convenience, service, brand or ethics

Discussion: What Do You Value?

Think about your recent purchases: Food and drinks Clothes and shoes Streaming services Gaming or entertainment What influenced your choice? Price? Quality? Brand? Convenience? Friends' opinions?

Step 1: Research Competitors

Businesses compare themselves with competitors by examining: Price and value Quality and features Location and accessibility Product range and variety Customer service quality Brand image and reputation Online reviews and ratings Speed and convenience

Step 2: Porter's Three Strategies

Michael Porter identified three main competitive strategies: 1. Cost Leadership - Being cheaper 2. Differentiation - Being different 3. Focus/Niche - Targeting a specific group Businesses choose ONE main strategy to focus their efforts

Cost Leadership Strategy

Being the low-cost provider in the market Examples: Aldi, Kmart, IKEA, McDonald's Processes used: • Buying in bulk for better prices • Efficient operations and systems • Simple product range • Reducing waste • Strong supplier relationships Key point: Low cost doesn't always mean low quality

Differentiation Strategy

Standing out by offering something customers value Examples: Apple (design), Nike (brand), Netflix (content) Processes used: • Innovative product design • Strong branding and marketing • Research and development • Superior customer experience • Quality control systems