Nature of competitive advantage driven by logistics

Nature of competitive advantage driven by logistics is based on value creation and cost reduction.

Effective logistics and supply and distribution chain management can be a key source of competitive advantage. The Japanese scientist’s Kenichi Ohmae originally proposed 3C model describes the connections between the Customer, the Company and Competitors. Each of the three entities interacts with the other two. First of all, competitive advantage manifests itself as a company’s ability to operate at lower costs than a competitor, which leads to lower prices or higher profits. Another important aspect is that the company and competitors offer certain values to the same customer. Often those values are different. A customer’s need is defined as obtaining the maximum value at the lowest cost. Of course, in the real world, this is hard to imagine, as more value often comes with more cost and higher price. However, it is very important to examine the value and price factors, because they are essential when a customer decides to buy a product from a particular company or competitor.

Ex. 12‑8 Ohmae’s 3C model for competitive advantage

Keywords: 3C, value advantage, cost advantage

Ex. 12‑9 Nature of cost advantage by logistics

Keywords: volumes, costs, unit price

Ex. 12‑10 Value creation by logistics function

Keywords: logistics functions, time, location, inventory, product

Ex. 12‑11 Advantage by value

Keywords: value, drill

Ex. 12‑12 Options to increase a value

Keywords: service, product

Ex. 12‑13 4 segments depending on value and costs

Keywords: cost advantage, value advantage

Ex. 12‑14 Competitive advantage by saving time and space in global business

Keywords: space, time

Ex. 12‑15 Logistical tools for increasing value or cost advantage

Keywords: value advantage, cost advantage

Ex. 12‑16 Logistics in Kolter’s marketing complex

Keywords: product, price, promotion, place

Ex. 12‑17 Value to a customer

Keywords: total cost of ownership, perception of value

Ex. 12‑18 Total cost of ownership

Keywords: hidden costs, purchase price

Ex. 12‑19 Decomposition of value

Keywords: response time, costs, service level

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