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    Competitive Advantage for Small E-Businesses

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    The research indicates no commonly-used theory appropriately explains small business adoption of e-business because each theory overlooks important aspects of small business characteristics. What seems to be the most noted theory in the literature for e-business strategy is Michael Porter's generic strategies matrix, which theorizes a company's success is reliant on its positioning strategy, which focuses on leveraging its strengths to assert successful operational outcomes. Michael Porter suggests the strength of a company ought to be classified into two components: cost advantage and differentiation. How can differentiation strategies help achieve a competitive advantage for small e-businesses?

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    Solution Preview

    Differentiation emphasizes more customer value. While customers and shareholders can appreciate lower costs, the idea of customer value is that the customer will benefit not only from the product or service but also the price. Customer value is inclusive of benefits and price, and improving the features and benefits of the product/service or dropping the price of the product/service can enhance this customer value. A new business needs to develop customer loyalty to increase a competitive advantage and improve customer value. ...

    Solution Summary

    This solution of 315 words discusses how Porter's strategic matrix and differentiation strategies can help small e-businesses achieve a competitive advantage.