Building Blocks of Competitive Advantage

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The Building Blocks of Competitive Advantage To excel in today’s economic environment there are four building blocks that you must adopt to obtain a competitive advantage. These building blocks are efficiency, quality, innovation, and customer responsiveness. By using these four basic building blocks an organization can lower costs and achieve differentiation. Due to the generic nature of these four factors any organization can adopt these building blocks no matter what service or product they provide. Efficiency which is the first of the four building blocks measures the level of proficiency in an organization. By properly managing an organization you can reduce the amount of materials to produce a given output or increase the productivity or your employees to maximize the output of a product within the same time period. As an example of this many organizations are training their employees on the skills needed to operate computerized equipment (Jones-George, 2011) which in turn maximizes the production of a product while reducing the workforce needed. By incorporating efficiency into an organization managers allow themselves to contend with companies from other countries where employees are paid a third of the labor costs of American workers (Stutz and Warf, 2009). Quality being the second building block in competitive advantage is the attempt to gain reputation for a product. As an example, you have the name brand items such as the auto insurance company Progressive that claim s to have the lowest premium cost of any auto insurance company. By enhancing the reputation of a product or organization this allows for the company to charge a higher price for their products and services while reducing the manufacturing costs, creating a higher competitive advantage. The third building block is innovation which is the process of creating new products or improving old

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