The last two blogs on strategy were about competitive advantage and competitive parity. In today's blog we would look at another term similar to these - competitive disadvantage.
No company really likes to be at a disadvantage, but the strategy of some of the firms only lead them to a competitive disadvantage. A firm is at a competitive disadvantage when its theory's implementation and the action it takes in these lines fail to create any economic value; if fact if a firm fails to create any such economic value it could be also seen as destroying the economic value. Such a competitive disadvantage results when the firm doesn’t align itself with the underlying economic process of the industry or the market.
We could relate here to the story of Yugo in USA as an example for having a competitive disadvantage - its attempt to come in as the lowest price with a negligence of on safety resulted in its failure.
Read in Kannada: http://somanagement.blogspot.com/2011/06/blog-post_02.html
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