What if your competitive advantage is easily replicated. Does it still remain one?
I read an interesting piece which said that the best competitive advantage lies in providing a unique customer experience. It is so easy to replicate a product, price off, promotional offer with the current technologies....but it is definitely not the same with customer experience.
An interesting example is that of a Harley Davidson. The product can easily be replicated, but what Harley sells is the sheer experience to dress in leather, ride through rough roads and not so frequented areas, with people frightfully looking on and STILL get noticed!
2 comments:
I agree-- not every competitive advantage is a sustainable competitive advantage. Also worth noting is that "unique experiences" is a consumer utility, and maximizing utility is easily the chief purpose of a product or a service. Unfortunately, consumer utilities can be affected by trends and fads, and I will therefore not call them sustainable. The Harely is an American icon, as is "Chaat" in India. It is difficult to erode the cache of such deeply rooted icons. Too bad these icons are not readily transferred accross consumer subcultures. Also, their popularity decreases over time-- far fewer college educated Americans today evince any interest in owing a Harley than did a generation (20 years) ago.
Branding is seen as a reliable means of sustaining customer loyalty. However, analyses that include the cost of branding in consumer lifetime value calculations reveal the toll taken by high advertizing costs on the economic surplus afforded by brand loyalty-- top line growth can be bad if the bottomline is adversely affected.
In the final analysis, laws of economics inexorably reduce the profitability of any market opportunity, as competitors are attracted by above average profits (computer market). Or, the product/category loses its appeal (Single serve juices).
Tnx Anonymous! Quite right about 'unique experience' being a 'consumer utility'. Pls refer to the next post pertaining to Brand Sluts - brands too 'may not' guarantee loyalty TODAY.
Cheers :)
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