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Competitive Advantage Analysis

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Competitive Advantage Analysis

You are advising a new Australian snack business. Read the business brief, then use evidence to decide how it could compete. Answer every question; explain your reasoning where asked.

Business brief: SunSprout Snacks

SunSprout is a small business in Adelaide making snack packs from locally grown fruit. Its packs use compostable wrapping and are sold at weekend markets and through a simple website. A standard pack costs $4.50. Nearby competitors sell familiar snack packs for $3.50–$5.00. SunSprout has a small budget, so it cannot afford a large advertising campaign or the cheapest ingredients. Customers who have tried the packs praise their fresh flavour and clear information about where ingredients come from. However, the business sometimes runs out of popular flavours, and its website delivery takes three days.

Analyse the advantage

A competitive advantage is a feature or capability that helps a business offer greater value or perform better than its rivals. Consider customer value, costs, and whether an advantage is difficult for competitors to copy.

1.Which statement best describes a competitive advantage?

A feature that helps a business perform better than competitors in ways customers value
Any business decision that increases the number of employees
A promise that a business will always make the most profit
A product that is cheaper than every other product

2.Choose the two strongest possible sources of advantage for SunSprout, based on the brief.

Fresh local ingredients and clear sourcing information
A large advertising budget
Compostable packaging that appeals to environmentally conscious customers
Having more employees than every competitor

3.Complete the sentence: A strategy based on offering lower costs and prices than rivals is called leadership.

4.Match each competitive strategy with the SunSprout action that best represents it.

Differentiation
Customer service
Cost leadership
Innovation

Reduce production costs enough to offer a lower price sustainably
Create a distinctive seasonal flavour using local fruit
Develop a reusable snack container return scheme
Offer fast, helpful responses and reliable delivery updates

5.Use one detail from the brief to explain why SunSprout may already have a differentiation advantage. Explain why this could matter to a customer.

6.SunSprout considers cutting its price to $3.00 per pack. Give one possible benefit and one risk of this decision.

7.True or false? If a business has a competitive advantage today, that advantage is guaranteed to last.

TrueFalse

8.SunSprout’s popular flavours sometimes sell out, while website orders take three days to arrive. Recommend one practical improvement and explain how it could strengthen the business against competitors.

9.A rival copies SunSprout’s compostable packaging. Name one other advantage SunSprout could build that may be harder to copy quickly, and explain how to develop it.

10.Design a short competitive strategy for SunSprout. State its target customers, one action the business will take, and the customer value that should make it stand out.