Competitive disadvantage

Competitive disadvantage
See also
Benefits of innovation Bargaining power of buyers Mobility barriers Atmosphere at work Threat of substitutes Perception of brand Perceived quality Corporate policy Examples of weaknesses

Competitive disadvantages - This is a certain feature of a company that offers products or services that are considered to be of much lower quality or not as good as those of other companies (competitors) on this market. I's considered as a negative feature of a company that can have a significant impact on its revenues, market position and consumer awareness.

Such a situation in a company may result from a large number of market factors. Inadequate conduct of business can lead to be far removed from the standards of other companies-competitors.

Examples of competitive disadvantages

One of the most important factors influencing competitive disadvantages may be inadequate human resources management. To a bad human resources management belong:

• poor treatment of employees
• inadequate training
• lack of motivation

These features can lead to serious convictions in the internal functioning of the company, which can lead into financial results. Workers must also feel well informed and properly involved in the workplace. Thanks to the right management skills and motivation, the following competitive disadvanteges can be exchanged into competitive advantages.

A serious problem in a company and its presence on the market may in some cases also be the underpayment of workers. Companies that offer a lower monthly salary for the same job than other competitors in the same market are considered as worse than them. This is a particular phenomenon that can be observed by an example of teachers in urban areas and rural areas. The salaries in the urban areas are quite higher than the salaries in the rural areas for the same workplace and the same request of experience.

Prevention of competitive disadvantages

Each company tries to function in the best possible way and lead its business in such a way that it generates the highest possible income. However, this is sometimes not possible because of the various factors, which are worse than those of they competitors. Research shows, that the best way to remove your competitive disadvanteges is to:

• radically change your current behaviour
• take significant risks

When a company is in a worse position than its competitors, it must find a way to become better than the other. It must find a thing or product that will make it stand out from the crowd. This may be for example:

• the use of newer technology
• better information security
• increased competence in the IT area

References

• Barclay P., Mishra S., Lulumiere M., (2014), Competitive disadvantage facilitates risk taking, Elsevier Inc, p. 126 – 127
• Iverson R., Zatzick Ch., (2006), High-Involvement management and workforce reduction : competitive advantage or disadvantage?, Simon Fraser University, p. 999 – 1002
• Jimerson L., (2003), The Competitive Disadvantage: Teacher Compensation in Rural America. Policy Brief, Rural School and Community Trust, p. 10
• Massis A., Kotlar J., Frattini F., (2013), Is Social Capital Perceived as a Source of Competitive Advantage or Disadvantage for Family Firms?, SAGE, p. 16-21
• Pawlina G., Kort P., (2004), Real Options in an Asymmetric Duopoly: Who Benefits from Your Competitive Disadvantage?, p. 27
• Withman M., Mattord H., (2009), Principles of Information Security, Tohmson Course Technology, p. 116, 556

Author: Maciej Plęskowski