Competitive Advantage and Rules for Selecting Competitive Advantages

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Questions and Answers

What is a competitive advantage in business?

Expectations and behaviors that make a business the same as its competitors
Improvements in quality, value, or delivery that set a business apart from its competitors (correct)
The size of a business relative to its competitors
The number of products a business offers compared to its competitors

What should be the focus of a business once a competitive advantage is determined?

The determined competitive advantage element (correct)
Offering discounts to attract more customers
Raising prices on products
Employee satisfaction

What is a rule for selecting competitive advantages mentioned in the text?

Select advantages that you won't act on
Keep the chosen advantages simple and act on them (correct)
Enforce company advantages without consequences
Choose numerous complex advantages

What is suggested in the text about enforcing company advantages?

It should carry a consequence like a reward or penalty (B) Signup and view all the answers

Which organization mentioned in Nigeria focuses on understanding customer needs as part of their competitive advantage strategy?

Globacom (B) Signup and view all the answers

What does Globacom aim to improve through its competitive advantage strategy?

Network quality and performance (C) Signup and view all the answers

What is the primary focus of the given text?

Discussing the importance of ethics in business (B) Signup and view all the answers

Which of the following statements best describes a competitive advantage?

A unique selling proposition that sets a business apart from its competitors (A) Signup and view all the answers

What is the ethical dilemma faced by Stacy?

Whether to offer a cash discount to a customer for tax evasion purposes (A) Signup and view all the answers

What is the primary purpose of including the "Ethics are Good for Business" section in the text?

To highlight the importance of ethical practices in achieving long-term success (B) Signup and view all the answers

Which of the following statements is true about the customer's request for a cash discount?

It is a form of tax evasion, which is illegal (A) Signup and view all the answers

Based on the information provided, which of the following could be considered a competitive advantage for Stacy's pet grooming business?

Providing a mobile pet grooming service (C) Signup and view all the answers

What is the definition of demographics?

A group sharing characteristics of a human population segment (D) Signup and view all the answers

Which of the following does not represent a logical need according to the text?

Fun (C) Signup and view all the answers

What do entrepreneurs aim to do with their products or services?

Change or improve current products or services (A) Signup and view all the answers

What is the meaning of marketing?

The process of selling products or services to customers (B) Signup and view all the answers

Which factor influences market needs based on the text?

Individual beliefs (B) Signup and view all the answers

What are personal needs according to the text?

Optional needs for thriving like fun and comfort (A) Signup and view all the answers

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Study Notes

Competitive Advantage

A competitive advantage is a unique feature or element that sets a business apart from its competitors through improvements in quality, value, or delivery.
Competitive advantages can also be referred to as core business values.
A competitive advantage must be the focus of the business once it is determined.

Rules for Selecting Competitive Advantages

Choose only a few and keep them simple.
Choose only those advantages that raise your competitive advantage.
It's not a competitive advantage until you and your employees act on it.
Choose only those advantages that you personally act on and won't compromise.
Enforcing company advantages should carry a consequence (reward or penalty).

Examples of Competitive Advantages

Honeywell Group, Nigeria

Products: Noodles, Pasta, Flour
Customer base: Diverse, African customer base
Competitive advantages: Excellent products, years of experience

Globacom, Nigeria

Products: Game Store, Glo Mobile Tutor, Borrow Me Credit, Mobile Newspaper, Medicare, Free Call When Roaming
Customer base: Diverse, across African continent
Competitive advantages: Target better service quality, increase levels of investment in network quality and performance, customer intelligence (understanding customer needs)

Competitive Advantage Game

Objective: Differentiate between cards with a competitive advantage and those that are about profit only.
Game overview: Students take turns selecting a card from the stack and reading the business quote or motto.

Ethics in Business

Ethics are the standards that help determine what is good, right, and proper.
Entrepreneurs often face ethical dilemmas.
Bad ethical choices may look like opportunities for profit in the short run but may cost more in the long run.

Ethical Dilemma

Example: Stacy, a mobile pet grooming service owner, faces a dilemma when a customer asks for a cash discount to avoid reporting the transaction on tax records.

Product Development

Sources: Products or services that solve a problem that previously had no solution, change or improve a current product or service.
Entrepreneurs can develop products or services based on their skills, hobbies, or specialized knowledge.

Demography

Definition: A group sharing characteristics of a human population segment, used to identify consumer markets.
Examples: Student body, teachers and staff, parents with teenagers, athletes, members of a specific school club.

Market Needs and Marketing

Market needs can be classified into:
- Logical needs (necessary for survival and thrive, e.g. safety, health, transportation)
- Personal needs (optional for survival but necessary for individual thrive, e.g. fun, pride, comfort, romance, acceptance)
Marketing: The means by which a product or service is made known and sold to customers.