Value Creation and Competitive Advantage Essay Example

Introduction

Creating value for the products and services is arguably the primary aim of any business entity. Value creation for customers enables a business to sell its products and services while creating value for shareholders as well. From a financial perspective, value creation occurs when a business earns revenue, or retune on capital, that is more than the expense. However, some analysts insist on a broader perspective of value creation, and that is separate from financial measures. They argue that value creation is recognized as a better management goal, as opposed to just financial measures. As such, analysts assert that value creation practically leads to sustainability and creating a competitive advantage of a business. In this study, a Canadian clothing store, Roots, is analyzed on how it has created value for its customer as well as a sustained competitive advantage to stay in the market.

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Value Creation

In the bid to create value for the customers, the company has conducted a comprehensive market research on the tastes, preferences, and reactions of customers to their goods. By so doing, the company has determined to research to understand what is important for their customers and what opportunities they have (Brenk, Burmeister, Luettgens & Piller, 2018). Roots also understands the value proposition, because this is equivalent to the amount of success for the product. Roots has been in the business for more than four decades but continues to create value of their products for their customers through improving customer experiences and service as well. The company understands the changing tastes and preferences of their customers, and this helps them to continually tailor its clothing that quenches their quest for fashion. In addition to the above strategies, the company successfully identifies the demographic composition in every market in ventures into, so that it targets the right segment for its products. Different customers in various areas will always have unique perceptions of clothing relative to that of the competitors, based on proximity and other factors as well (Carnevale, Loureiro & Kabadayi, 2018). For instance, the company has as many stores in Taiwan as it has in Canada, and this fact is due to its commitment to learning the market promptly.

Competitive Advantage

The sustained competitive advantage for the company has been prompted by a number of strategic moves. For instance, the company maintains the iconic Canadian brand with a rich heritage in the market, which is a lasting affinity for its products. Also, the company diversifies product portfolio with enduring icons, which implies that the customers can always associate the products with style, comfort, functionality, and versatility (Brenk et al., 2018). The company has products that are diversified across all seasons and fits men, women, as well as children. Further, the company has products that transcend generations, in that they have broad demographic appeal with strong loyalty (Chiang, 2016). Most importantly, the company boasts of an experienced and passionate management team that strategically plans and executes directives to continually improve the competitive advantage of the company ahead of the competitors. These are some of the ways through the company has sustained its competitive advantage in the business for decades.

Conclusion

Value creation and competitive advantage are two goals that every business must achieve in order to achieve profitability. Customers deserve the best goods and services, but this can be achieved through market research to tailor products that coincide with the tastes and preferences. Competitive advantage helps a business to stay ahead of the competitors, and through creating value of their products they can achieve it.

References

Brenk, S., Burmeister, C., Luettgens, D., & Piller, F. (2018). Value creation openness: A new perspective on business model design and competitive advantage. Academy Of Management Proceedings, 2018(1), 11534. doi: 10.5465/ambpp.2018.11534abstract

Carnevale, M., Loureiro, Y., & Kabadayi, S. (2018). Customer value creation for risky products: The role of brand trust and trusting beliefs. Journal Of Creating Value, 4(1), 1-21. doi: 10.1177/2394964317752731

Chiang, C. (2016). Canadian retailer Roots finds surprising success in Asia. Vancouver Sun. Retrieved from https://vancouversun.com/business/local-business/canadian-retailer-roots-finds-surprising-success-in-asia