Sample Thesis Paper
The differentiation advantage is one of the biggest advantages of the value chain. Differentiation can benefit an organization in increasing its customer base and through differentiation organization can opt for premium pricing strategy. This advantage can come from any part of the value chain and it can help the organization in both the short and the long run. Anything can be considered as a differentiation factor if it gives a sustainable competitive advantage to the organization (Joyce & Woods 2001).
For example raw materials can be treated as a differentiation factor because they are not widely available to other competitors. Similarly, a high quality value adding service in the distribution channel can be treated as a differentiating factor. The element of differentiation initiate from uniqueness and a unique item in a product or service can be extremely beneficial for that product or service. Differentiation in the value chain is achieved by adding value at different areas by changing the individual value activities or uniqueness in the final product can be added to create a sustainable competitive advantage.
Michael Porter identified certain factors of uniqueness (Porter 1998). These factors are:
- Decisions and policies
- Linkages among all the activities in a process
- Institutional factors