Cost and Value in Analysis of Competitive Advantage: 2 Sides of the Same Coin?

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Competitive Advantage > Forum > Cost and Value in Analysis of Competitive Advantage: 2 Sides of the Same Coin?

Cost and Value in Analysis of Competitive Advantage: 2 Sides of the Same Coin?
Andrew Blaine, Business Consultant, South Africa, Member
COST and VALUE are words used to identify the same quality, but from different viewpoints. The producer/manufacturer concentrates on cost, while the consumer/customer looks at value.
From this analysis comes the amazing range of products that are, essentially, the same - from motor vehicles to orange juices.
It is important that we consider competitive advantage in the same manner - from the viewpoint of both the manufacturer and customer.
By doing this, does the quality aspect become an essential element in the identification of competitive advantage?
 

 
Quality Aspect is Essential
Bernhard Keim, Business Consultant, Germany, Premium Member
Being cheaper is not a lasting advantage for most businesses. Especially when most competitors follow the same strategy it becomes a race to the bottom line. Revenues must be really high if you want to succeed in this race, otherwise you can't capitalize on economies of scale.

If you are cheap it's hard to become better. If you offer better quality, you always can become cheaper.
 

 
Price and Value - the Difference
Andrew Blaine, Business Consultant, South Africa, Member
@Bernhard Keim: Thank you for your commentary Bernard, but price and value differ. For example a Mercedes costs more to buy than a VW but, if the Mercedes is a "Monday" car, it is often better to buy the VW as the value to you will be better. I hope this explains the difference?
 

     
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