Competitive advantage is an advantage gained over other entrants by providing higher value to consumers by either lowering commodity prices or providing greater advantages and services to justify high costs. To acquire a competitive advantage, LRM Shoe Company plans to implement Porter's generic strategies. The model was chosen because it provides both approaches to the target market, wide and narrow markets, and it is simple to implement and understand for the business model. This is because it is consistent with LRM Shoe Company's goals of success in both local and worldwide markets (Magretta, 2011). According to Porter, there are two types of competitive advantage, these are cost leadership and differentiation. LRM Shoe Company shall mainly employ differentiation in the Argentina market. However, it shall also employ cost leadership in certain sections of the shoes such as children wear. The company is actively engaged in the cost leadership approach within the high-end shoe market where it offers among the lowest prices which help boost sales within a short period of time. It has capitalized on differentiating its products by producing unique designs and offering the option for custom made shoes at cheap prices. It is able to do this by sourcing support funds for such projects through crowdsourcing platforms and economies of scale from the parent company which makes it easy for it to start up (Porter, 1998).
Conclusion
Competitive advantage is important for a new market entrant such as LRM corporation and Porter’s generic strategies offer an excellent and simple model for the company. Differentiation is important in drawing attention and culturing a loyal following while cost leadership helps attract consumers by offering high quality at affordable pieces.
References
Magretta, J. (2011). Understanding Michael Porter: The essential guide to competition and strategy (1st ed.). Brighton: Harvard Business Review Press.
Porter , M. E. (1998). Competitive advantage of nations. Florence: Free Press.
References
Porter, Michael, Competitive Advantage, The Free Press, NY, 1985
An outline of the task
Paragraph one – gives the meaning of competitive advantage
Paragraph two – highlights the reason to picking Porters competitive advantage over other models.
Paragraph three – explains the model adopted by LRM Shoe Company.
