Importance of Competitive priorities for any organization

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Importance of Competitive priorities for any organization
Saiyed Rizvi
Sr. Project Manager
Toronto Water, City of Toronto
Candidate of MSc Information and Technology Management
Sheffield Hallam University, Sheffield, United Kingdom
Any Business strategy is a short or long term plan of action of an organization designed to achieve a
particular goal or set of goals or objectives. It states how business should be conducted to achieve its
goals, meet the expectations of its customers, and sustain a competitive advantage in the marketplace
Porter (2008) argues that there are five competitive forces that shape business strategy of any business:
Porter (1985, p. 35) further explains that there are three potentially successful generic strategic
approaches to outperforming other firms in an industry:
1. Overall Cost leadership
2 Differentiation
3. Focus of Market Segmentation

There are three common business/competitive strategies:
Type Definition
Overall Cost leadership
Producing the lowest cost products or services in the market
Focus or Market Segmentation Satisfying the need of a particular market niche
Product Differentiation
Offering products that differ significantly from the
competition
Competitive Priorities are critical, operational dimensions a process, an organization or supply chain must
possess to remain competitive in the market now and in future. (Krajewski, et al, 2013)
A business chooses and decide on competitive priorities based on the short and long terms business
strategies and goals in order to have a competitive edge over competitors. There are few challenges that
every business faces to have competitive edge on the competition.
These challenges are:
Developing and Implementing Effective Strategies
Maintaining an good clientele
Meeting the challenges of increased competition in the business environment.
Keeping up with technology advances.
Learning to do more with less.
Staying ahead of competitors.
Keeping an eye on the future.
An organization\business must carefully choose its competitive priorities based on the business
competitive strategies.
Stuck in the Middle
"The three generic strategies are alternative, viable approaches to dealing with the competitive forces. The
converse of the previous discussion is that the firm failing to develop its strategy in at least one of the
three directions-a firm that is "stuck in the middle'-is in an extremely poor strategic situation. This firm
lacks the market share, capital investment, and resolve to play the low-cost game, the industrywide
differentiation necessary to obviate the need for a low cost
position,or the focus to create differentiation or a low-cost position in a more limited sphere.
The firm stuck in the middle is almost guaranteed low profitability. It either loses the high-volume
customers who demand low prices or must bid away its profits to get this business away from
low-cost firms. Yet it also loses high-margin businesses-the cream-to the firms who are focused on high-
margin targets or have achieved differentiation overall. The firm stuck in the middle also
probably suffers from a blurred corporate culture and a conflicting set of organizational arrangements and
motivation system" (Porter, 1985 p.41)
Here are 9 competitive priorities that are grouped into 4 competitive capabilities dimensions:
A- Cost
1- Low-cost operation

B- Quality
2- Top Quality
3- Consistent Quality
C- Time
4- Delivery Speed
5- On-Time Delivery
6- Development Speed
D- Flexibility
7- Customization
8- Variety
9- Volume Flexibility
(Krajewski, et al, 2013)
The business strategies may change over period of time and hence corresponding competitive priorities.
In Simple words:
"Any organization's competitive priorities are driven by and depends upon business's competitive
strategies"
To prove the above statement, until 2005 Mercedeze Benz (MB) business strategy was Focused or Market
Segregation i.e satisfying the need of a niche market. Until 2005 MB fleet contained only high end
luxurious cars to cater a particular customer based who were interested in top quality and luxury. By
introducing a new model B200 in 2005, MB announced that they have added another competitive priority
in their business strategies which is to add Variety to cater relatively low-end starter vehicle while
providing its customer a sense of luxury and above class vehicle. Comparing MB, Porche still cater only
niche market by keeping their competitive priorities to Top quality.
Process Considerations for each competitive priority
We will further map three business and competitive strategies with competitive priorities and
corresponding processes. We will use examples using existing business models
Business or competitive strategy: Overall Cost Leadership
Competitive capability: Cost
Competitive priority: Low-cost operation
This model will refer to an organization with an Overall Cost Leadership as a business and competitive
strategy factoring Cost as competitive capability and a Low cost operation as the competitive priority.
These organizations deliver services and products at the lowest price possible to satisfy internal and
external customers.
In order to reduce cost and have a competitive edge in the market, such organizations will need a rigorous
process analysis to ensure efficiency in each process and methods (to reduce scape, rework and overheads
etc) producing the products and services. Another important considerations for such organizations to
invest in the automation and technology to keep the cost low to be competitive.
An example of such organization is China’s Huawei telecommunications producing networking
equipments. Huwei has grown to China's largest and world's largest telecommunication organization
competing directly with Cisco. They achieve low cost by keeping manufacturing in China and their R&D

in developing countries like India and Pakistan. They are able to keep the low cost competitive edge over
their competitors by keeping the operation cost low. (Anon.b, 2015)
Business strategy: Differentiation
Competitive capability Time and Flexibility
Competitive priority: Variety, customization, delivery speed and on time delivery
Businesses use Product Differentiation to gain a competitive edge in industries where multiple
competitors produce similar products or services. (Anon.a, 2015)
This model will refer to an organization with a Product Differentiation as business strategy factoring
Flexibility as competitive capability and Variety and Customization as the competitive priorities. These
organizations deliver services and products allowing their customers and clients more flexibility to choose
the products and services and be able customize as per their requirements. Such businesses must consider
processes supporting large volumes and be able to work closely with the market demands in order to meet
the market demands.
An example of such business strategy is Dell. This organization has a competitive edge over other
competitors as they provide their customers ability to customize the products (for example a server
hardware) and choose from a variety of available options.
Business strategy: Focus Market Segmentation
Competitive capability: Quality
Competitive priority: Top Quality and Consistent Quality
This model will refer to an organization with a Market Segmentation as business strategy factoring
Quality as competitive capability and a Top Quality as the competitive priority. These organizations
deliver top quality product and services for satisfying the need of a particular market niche.
These organization must emphasis on the processes focussing to generate top notch quality products and
services. From manufacturing stand point, those top qualities may include, superior features, product
durability and very controlled quality control. An example of such organization is Rolls Royce which is
known for its superior quality control, feature and serving a special group of customers.
Competitive priorities and the impact upon the company's enterprise computing platform
As noted by Porter and Millar (1985) that Information technology is changing the way companies operate.
It is affecting the entire process by which companies create their products. Furthermore, it is reshaping the
product itself: the entire package of physical goods, services, and information companies provide to create
value for their buyers.
Adoption and use of information technology can play a significant role for any organization to meet their
competitive priorities and allows companies to maintain a competitive advantage over their competitors.
In the section below, we will discuss some of the competitive priorities and their impact on any
organization's computing platform. We will further relate to some of the existing businesses.
Businesses with Low-Cost-Operation as their competitive priority must engage an enterprise computing
platform that is designed to reduce cost by increasing productivity, reduce waste and overheads. An

example of such businesses are Costco and Walmart which excel in providing low-cost products to their
customer.
Businesses with Delivery speed and On-time delivery as their competitive priorities must use an
enterprise computing platform which is highly robust, reduce lead time, fully integrated with all business
processes (for example, suppliers and customer modules). For example, Dell has designed his computing
platform that is completely integrated with customer relations module, order fulfillment and supplier
management module. This integrated computing platform allows Dell to reduce lead time making sure
On-time delivery and also assist in cost reduction hence increasing the profitability of the business.
Businesses with Top quality as their competitive priority must make sure that their computing
environment must use computing platform that support to an enhanced customer relationship module,
making sure that superior quality of the products and services is paramount on all used module and
service.
Businesses with Variety as the competitive priority must make use of the computing platform that allows
handling of large volume, streamlined customer relationship, order fulfillment and supplier relationship
module. A great example of such is Amazon.com.
Conclusion
We have discussed three different business strategies and the corresponding competitive capabilities and
priorities. As we can see that an organization is unable to focus on all four competitive capabilities (cost,
quality, delivery, and flexibility) and the nine competitive priorities as these are driven by the business
strategy and objectives. Focusing performance on one priority limits/eliminates the ability to focus on
another priority. Further, for any business to have a competitive advantage over rivals, business's
computing platform\environment must support the business processes that are designed to meet the
competitive priorities.

References
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