6.4 Competitive Advantage (Figure 6-3) We discussed three types of competitive advantages cost, differentiation, and marketing...

  

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6.4 Competitive Advantage (Figure 6-3) We discussed three types of competitive advantages– cost, differentiation, and marketing advantages. For each area of advantage, identify a business that has a competitive advantage in that area. Briefly explain how each business's source of differentiation advantage helps the business attract and satisfy target customers. A. For each area of differentiation advantage, identify a business that has a competitive advantage in that area. Explain how each business's source of differentiation advantage helps the business attract and satisfy target customers. (Note advantage is always relative to another – so you should also explore how the business compares to its competitors in that area. 2-3 sentences per advantage will suffice). FIGURE 6-3 COMPANY SOURCES OF ADVANTAGE AND COMPANY PERFORMANCE Company Performance (2010) Dell Apple Nike Source of Advantage: Low Cost Differentiation Marketing Financial Performance Percent Gross Margin 19.1% 42.9% 55.9% Return on Sales (pre-tax) 4.2% 29.8% 20.3% Return on Assets (pre-tax) 6.5% 24.5% 12.5% Asset Management Sales-to-Assets Ratio 1.57 0.82 1.32 Accounts Receivable (days) 40 58 24 Inventory (days) 7 6 28 Marketing Performance Marketing & Sales Expenses (% sales) 9.2% 6.7% 23.8% Marketing Return on Sales 9.9% 36.3% 32.1% Marketing Return on Investment 107% 545% 135% 6.4 Competitive Advantage (Figure 6-3) We discussed three types of competitive advantages– cost, differentiation, and marketing advantages. For each area of advantage, identify a business that has a competitive advantage in that area. Briefly explain how each business's source of differentiation advantage helps the business attract and satisfy target customers. A. For each area of differentiation advantage, identify a business that has a competitive advantage in that area. Explain how each business's source of differentiation advantage helps the business attract and satisfy target customers. (Note advantage is always relative to another – so you should also explore how the business compares to its competitors in that area. 2-3 sentences per advantage will suffice). FIGURE 6-3 COMPANY SOURCES OF ADVANTAGE AND COMPANY PERFORMANCE Company Performance (2010) Dell Apple Nike Source of Advantage: Low Cost Differentiation Marketing Financial Performance Percent Gross Margin 19.1% 42.9% 55.9% Return on Sales (pre-tax) 4.2% 29.8% 20.3% Return on Assets (pre-tax) 6.5% 24.5% 12.5% Asset Management Sales-to-Assets Ratio 1.57 0.82 1.32 Accounts Receivable (days) 40 58 24 Inventory (days) 7 6 28 Marketing Performance Marketing & Sales Expenses (% sales) 9.2% 6.7% 23.8% Marketing Return on Sales 9.9% 36.3% 32.1% Marketing Return on Investment 107% 545% 135%

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Dell Low Cost Source of Advantage The company is following the low cost strategy and hence the companys gross percent margin is very low when compared ... View the full answer