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Prof. Dr. Satya Subrahmanyam Department of Business & Management TISHK International University Erbil Kurdistan |
Ms. Sara Azad Department of Business &Administration TISHK International University Erbil-Kurdistan |
The aim of this study is to examine the competitive strategies-cost leadership and differentiation and its influence on competitive advantage in Carrefour-Erbil. Both strategies are working to gain a competitive advantage. The two sorts of the strategies are conflicting in the execution process concerning, decision making, control system, human resource, information system and job design. These internal differences propose both strategies need opposing parts for market study. The author utilized a survey as part of a quantitative technique in research methodology; the survey was adapted from a different academic source. The researcher distributed 120 questionnaires randomly to customers who are visiting Carrefour in Erbil, but only 96 questionnaires gathered correctly. The findings revealed that cost leadership is more effective in gaining a competitive advantage at Carrefour Hypermarket and Carrefour supermarket
Keywords: Competitive strategy, cost leadership, differentiation, competitive advantage, CarrefourIn today's competitive business environment, competitors are expected they could be global businesses, domestic or international competitors. A business selecting to serve the wide market and to develop and grow benefit by less cost is known as a cost leadership strategy, though businesses that pursue to gain benefit by utilizing uniqueness is known as a differentiation strategy. For instance, the world's top one business which is Wal-Mart is effectively and efficiently applying only one strategy which is a low-cost strategy (al2017). On another hand, many businesses had shown the effectiveness and succeed with executing one of the strategies which are a differentiation for instance Mercedes Benz. In this study, the author attempts to analyze the comparison between cost leadership strategy and differentiation strategy and its relationship with a competitive advantage. Various academics and scholars refer to the porter's generic strategy as being one of the greatest with significant contributions to the strategic management literature. In order to businesses gain greater income and outperform its competitors, they should take a perfect selection or decision between a differentiation strategy and a cost leadership to stop the essential contradictions of different strategies (Bertozzi, et al. 2017). Whether the strategy of differentiation and cost leadership strategy is equally effective is a far not as much of debated matter though, as proven by the moderately some previous studies and literature on the study. On the other hand, the cost is negatively related to the market share, this means a lower cost of the product will have a positive influence on the market share. Differentiation and cost leadership strategies are two common and widely used studies within the strategic management field and have been broadly and generally debated. According to Porter (1985), each of these three generic competitive strategies is a completely different way of creating a sustainable competitive advantage. Moreover, this confirms that a low-cost strategy and differentiation strategy are two opposite strategies. The reason that this study concentrates on Porter's generic strategies framework, is because porter's framework is directly linked with a competitive advantage (Bayraktar, et al. 2017). A business should, consequently, make a decision either selecting differentiation or low-cost strategy, moreover, several studies proved that businesses will be able to gain a competitive advantage by employing only one of the mentioned strategies. Moreover, businesses likewise can implement focus strategy through focusing on a narrow segment and through highlighting either differentiation or lower cost. The previous study proved that product differentiation strategy is significantly related to market share (Dombrowski, et al.2018).
The main of this article is to examine the competitive strategies-cost leadership and differentiation and its influence on competitive advantage in Carrefour-Erbil.
The followings are the main research objective: -To analyze the relationship between cost leadership and competitive advantage in Carrefour. -To analyze the relationship between differentiation and competitive advantage in Carrefour. -To examine which strategy is more effective than others to gain competitive advantage at in Carrefour.
Based on the above research objectives, the author stated the followings research questions: Research question one: is there a relationship between cost leadership and competitive advantage in Carrefour? Research question two: is there a relationship between differentiation and competitive advantage in Carrefour? Research question three: which strategy is more effective in gaining a competitive advantage at Carrefour?
H1: There is a significant and positive influence of cost leadership on competitive advantage in Carrefour. H2: There is a significant and positive influence of differentiation on competitive advantage in Carrefour.
A Harvard professor Michael Porter has defined set tactics containing three overall sorts of of strategies that are typically executed by businesses to reach and sustain competitive advantage. Moreover, these three approaches are well-defined two separate measurements: scope and source of strategy. The source is a supply measurement and concentrates on the core competency of the company.Precisely, Porter determined two chief capabilities are the most important for instance product low cost and product differentiation (Karyani & Rossieta, 2018). On the other hand, the scope is a demand measurement which concentrates on the target. Porter's generic approaches are shown in figure (1):
It has been proven by many academic scholars and previous studies that porter's generic strategy has a positive influence on the company's profits. Moreover, all generic strategies defined by porter (cost strategy, differentiation strategy and focus strategy) might not be all three strategies may not be similarly effective and successful for a business (Abdolshah, et al. 2018). This difference among all three generic strategies because of that the strategies vary on some of the dimensions and has various needs, for instance concerning management style, organizational arrangement, human skills and capabilities, incentive policy and control system.
Effectiveness and success might differ relying on the wellness of suit between the business and the chosen strategy, this facilitates the business to make the correct decision to adopt the right and effective strategy to gain competitive advantage. Business's success is depending on choosing the strategy that properly and best fits the business's resource and avoid competitors from replicate your strategy. These nonexclusive procedures are ways to deal with outflanking contenders, and each includes a recognizable course to execution advantage yet shares the hidden rule that execution is at the core of any technique (Kaya, 2015). Porter's theory focusses on the best way to assemble the
Porter's strategy stays a standout amongst the most practical upper hands of a firm through situating. It is, even remarkable in the key administration writing has more, a prescriptive model, where he sees the execution of overwhelmed corporate aggressive procedure throughout a firm is a component of two variables – industry structure the previous 30 years. Porter (1980, 1985) contends that and its market situating. The capacity to make benefit in predominant execution can be accomplished in an business relies upon how solid is its situation in the market. aggressive industry through the quest for a conventional The outside condition of the business or the determinants of procedure, which he characterizes as the advancement of a the mechanical gainfulness can be dissected through his general cost initiative, separation, or centre way to deal acclaimed 'Five Forces' hypothesis. It is critical that so as to with industry rivalry.
comprehend its vital position and settle on a few decisions (Asiedu,2015). As a standout amongst the most basic promoting components for both advertising professionals and scholastics, the item technique is similar, if not increase, vital with regards to developing business sector firms' fare business. Because of the basic job to an association's prosperity, send out item procedure has drawn the consideration of an extensive number of scientists as a key determinant of fare execution. In spite of broad investigation into the precursors and outcomes of fare item systems, the outcomes stay uncertain. On the off chance that a firm does not seek after one of these system types, it will be trapped in-the-centre and will encounter bring down execution when contrasted with firms that seek after a nonexclusive technique (Tokman, et al.2016). These join with the scope of market fragments focused to create three conventional methodologies for accomplishing better than expected execution in an industry: cost initiative, separation, and centre or thin degree.
The assortment on the nation and social dimension and the different estimations of execution add greater intricacy to the item execution relationship for global markets. The nonexclusive methodologies as created by Porte (1980; 1985) for accomplishing an upper hand position by an association are item separation and cost initiative. Item separation being the most generally utilized one of these two key typologies (Banker, et al.2014). He contended that cost administration and separation techniques are totally unrelated. Ongoing writings and research thinks about having in any case, scrutinized this thought perceiving the way that associations may seek after components of the two kinds of system. All things considered, past explores have demonstrated that some of the assembling associations see the separation system as an increasingly imperative and unmistakable intends to your strategy. These nonexclusive procedures are ways to deal with outflanking contenders, and each includes a recognizable course to execution advantage yet shares the hidden rule that execution is at the core of any technique (Kaya, 2015
In today's competitive business environment, many companies are looking for the best method to gain a competitive advantage; Porter's generic strategies currently are appropriate and skilled to assist and aid as a direction for worldwide business in defining the significant strategy to achieve its goals and reached the maximum outcome (Pulaj, et al.2015). These included, yet were not constrained to, near preferences in understanding nearby work advertise elements; one of a kind access to other neighbourhood assets, for example, arrive; and solid relations with their neighbourhood governments that have consistently offered them particular asset get to (Klaas & Klein, 2017). Businesses with these abilities are equipped for picking up a competitive advantage by conveying indistinguishable items from the opposition at costs beneath the business normal to accomplish a bigger piece of the pie, or that which coordinate the business normal to increase higher benefits(Brenes, et al.2014).Therefore; the encouragement of employing and applying low-cost strategy is the range to which businesses provide the low price of services or product in a competitive business environment. Cost leadership comparative to rivals is the subject running over the entire general cost leadership strategy and the impartial is evidently general business cost leadership (Salavou, 2015). In surviving writing, access to minimal effort assets has been the most talked about preferred standpoint supporting firms' ease procedure in creating nations. In this way, the Cost Leadership Implementation proposed show raises and distinguishes a basic key issue that needs administration consideration. It is obvious that many businesses attempt to adopt price or cost provider of products with the greatest alleged values. A firm that has effectively accomplished a minimal effort position will have the most reduced costs in respect to contenders.
accomplish upper hand in contract to a minimal effort technique. While different sorts of hierarchical systems have been distinguished throughout the years, Porter's conventional techniques remain the most generally bolstered and recognized in key administration writing (Panwar, et al.2016). A separation methodology includes the firm making an item/benefit, which is viewed as extraordinary in some perspective that the client esteems on the grounds that the client's needs are fulfilled. Then again, cost administration accentuates minimal effort with respect to that of the contenders (Porter, 1980; 1985). Porter (1985) contended that there are two bases of preferred standpoint a firm can have: ease or separation.
At last, the centre technique includes focusing business endeavours on a decided gathering of purchasers, item section or geographic market. The key though is that cost and cost are free decisions, and this system is centred on expense. Economies that are free of scale can give the strongest premise to a cost initiative technique. Moreover, when endeavouring to attain a generally low-cost strategy position, low cost comparative to rivals is the subject of implementing the overall business strategy (Tan, 2017).
According to Brenes, et al. (2014), the strategy of cost leadership needs quality with price aggressiveness, however, it is attempted by businesses to have a competitive advantage by applying an effectively lower cost compared with the competitors. A firm can utilize such a situation to either bring down its costs and gain the piece of the pie and deals from adversaries or keep its costs at the present market level and make moderately more benefit per unit sold. In this manner, the assembling needs can support one of the referenced techniques somehow or another(Asiedu,2015). The model adjusts the outside and inner elements that impact on actualizing cost initiative system and it draws consideration for organizations how completely execute such technique. These can be gathered into three classes; access to crude materials, access to an item or process innovation, and access to dispersion channels. Achieving low-cost tactic normally needs aggressive cost decreasing and above control, prevention of marginal purchaser accounts, and minimizing the cost of some fields, for instance, advertisement, services, and research and development. Subsequently, such methodology is proposed to be exceptionally powerful as all components
Every one of the rests of the variables gives a progressively generous premise to a cost leadership system, however, it is contended that each is controlled by industry structure. Before the development of the East African Community, they had explicitly conveyed their favourable position for the most part on their nation based minimal effort asset points of interest and related advantages (Mani & Nandkumar, 2016). The factors in this structure are not estimated independently in light of the fact that the factors in a single gathering can impact the other gathering variable and hence it has an effect on the result of the entire procedure.
administration system since it is reliant on elements outside administration ability to control. It is likewise imperative that the nature and communications of all usage factors influence the procedure factors and thus the result(Lindstad, et al.2016). According to Abdolshah, et al. (2018), to sustain in obtaining and gaining a position usually needs a high level of market share for instance easy access and availability of raw materials. Nearby firms in the East African district are not special cases. The cost leadership procedure accepts that competitive advantage is the result of creation techniques focused on having the most reduced assembling cost, to empower the firm to offer costs that are perfect or lower than those of rivalries.
According to Dombrowski, et al. (2018) stated that differentiation applied when a product seems to be unique with high quality and standard. Differentiation involves distinguishing the service or a product provided by the company, making something that is observed to be unique in the market place. A rivalry is especially exceptional in over-provided economies; rivalry will, in general, create between various item classes, which play out a similar capacity with regards to complex needs. Supply is unmistakably better than interest, in quantitative and subjective terms. It represents giving advantages of administrations and items uniquely in contrast to contenders however at a similar cost or some of the time higher. Differentiation techniques are widely inclusivein market economies and are overarching methods for getting a competitive
are focused just on the effect that it has on executing a cost advantage (Karyani & Rossieta, 2018). administration system. Cost administration methodology looks to accomplish better than expected returns over contenders through low costs by driving all parts of exercises towards diminishing expenses(Abdolshah, et al. 2018). So as to execute the fruitful differentiation procedure, it is important to recognize the key client first. Furthermore, he stated that due to its required for uniqueness differentiation and a high level of market share don't usually move together. This system targets sections where customers The minimal effort system underscores having the most esteem uniqueness and separating characteristics of the reduced expenses, not really the least cost, in a market. The acquired items. concentration of businesses execution of lower cost strategy is on strict efficiency in all domains and cost control. A firm endeavouring to understand a minimal effort technique should pressure assets that encourage proficiency. The separation procedure, thusly, can be outlined as offering items with uncommon or solitary credits in connection to those of contenders. Cost Differentiation could be according to numerous fundamentals or aspects, comprising product features, reputation, networks, design, customer service and brand image. In the event that contenders work in limited or a similar market section, it is reasonable to apply centred differentiation (Brenes, et al.2014). leadership strategy procedures give points of interest by Writing in key administration gives a few characterizations means of scale, proficiency and access to ease inputs. of business procedure that clarifies how firms contend in Murray further contends that 'ineptitude, as a rule, is their significant market situations (Banker, et al.2014). certifiably not a solid establishment for a supported cost Additionally, the measure of rivalry base is critical while
executing the differentiation methodology. An effective differentiation strategy should be according to features that are not easy for rivals to imitate (Dombrowski, et al. 2018). There are clients with various inclinations available and they have distinctive necessities as far as differentiation. A company's uniqueness in an esteem movement is controlled by a progression of fundamental drivers which are the hidden reasons why an action is extraordinary and without which a firm can't completely create methods for making new types of differentiation or analyze how supportable the current differentiation is. We contend that item differentiation systems emphatically add to send out execution in universal markets, particularly during furious cost rivalry (for instance, caused by minimal effort contenders entering worldwide markets) or diminished cost aggressiveness because of large scale monetary conditions (for instance, conversion scale valuation for the exporter's nation of origin) (Bayraktar, et al. 2017).
One of his most vital hypotheses concerns conventional business-level methodologies. (Dombrowski, et al. 2018), depicts nonexclusive techniques as the "predominant worldview in the business strategy writing". Predominant
advantage (Karyani & Rossieta, 2018). So as to execute the fruitful differentiation procedure, it is important to recognize the key client first. Furthermore, he stated that due to its required for uniqueness differentiation and a high level of market share don't usually move together. This system targets sections where customers esteem uniqueness and separating characteristics of the acquired items. Differentiation could be according to numerous fundamentals or aspects, comprising product features, reputation, networks, design, customer service and brand image. In the event that contenders work in limited or a similar market section, it is reasonable to apply centred differentiation (Brenes, et al.2014). Writing in key administration gives a few characterizations of business procedure that clarifies how firms contend in their significant market situations (Banker, et al.2014). Additionally, the measure of rivalry base is critical while
et al.2018). This area talks about how an association can break down, recognize, and create competitive advantages utilizing apparatuses, for example, Porter's Five Forces, three nonexclusive techniques, and esteem chains(Klaas & Klein, 2017). Porter (1980; 1985) recognized three conventional techniques of cost authority, separation and core interest. So as to remain in front of rivalry, associations need to constantly grow new competitive advantages. It is along these lines no assurance that the present competitive advantage will do the trick later on. Competitive advantages are regularly brief as contenders frequently look for approaches to copy the competitive advantage. Porter has exhibited different hypotheses in his books and articles that have been broadly recognized and that have picked up notoriety inside business writing. Increasing competitive advantage is basic for associations. Porter's theory invalidated the contention of all organizations having a one of a kind technique while fortifying that effective - and less fruitful - organizations have to consolidate factors that decide or clarify their dimension of execution(Klaas & Klein, 2017).
esteem (what purchasers will pay) comes from offering lower costs than contenders for proportional advantages or giving remarkable advantages that more than balance the more expensive rate (Porter, 1985). According to (Kaya, 2015), characterize competitive advantage as 'an item or administration that an association's clients esteem more exceptionally than comparable contributions from its rivals' (at the end of the day, you have something valuable (i.e. items, administrations, capacities) that your rivals don't have). The simple presence of competitive advantage gets underway imaginative advancements that reason points of interest to scatter as contenders endeavour to even the odds (Christiansen, 2001). The significance of competitive advantage and unmistakable abilities as determinants of a company's prosperity has expanded colossally in the ongoing past dependent on the conviction that central premise of better than expected execution in the long haul is an economically competitive advantage. The presentation of conventional procedures in 1980 propelled numerous analysts to handle the hypothesis to discover supporting proof. Much research was done inside a couple of long stretches of the presentation and along these lines additionally, a significant part of the past research presented in this paper goes back to '80-'90s(Dombrowski, The aim of this study is to examine the competitive strategies-cost leadership and differentiation and its influence on competitive advantage in Carrefour-Erbil. Both strategies are working to gain a competitive advantage. The author utilized a survey as part of a quantitative technique in research methodology; the survey was adapted from a different academic source (Furrer, et al., 2008 and Kinyuira, 2014). The researcher distributed 120 questionnaires randomly to customers who are visiting Carrefour in Erbil, but only 96 questionnaires gathered correctly. The survey was designed in two separate parts, the first part of the survey was regarding the participants personal or background information for instance participants' gender, participants' age, participants' marital status, and participants' careerfurthermore, the second part of the survey was designed into three separate sections to measure and analysis carrefour's cost leadership strategy and differentiation strategy and how they are related to competitive advantage. The total questions used in order to find whether cost leadership strategy works better than a differentiation strategy or differentiation strategy works better than cost leadership strategy in order to gain a competitive advantage in Carrefour. Findings
As the initial step of analysis in this study, the author attempted to measure the reliability of the questions that were applied to find whether cost leadership strategy works better than differentiation strategy or differentiation strategy works better than cost leadership strategy in order to gain a competitive advantage in Carrefour. However, as indicated in table (1), the reliability for two independent
factors that each factor had 8 questions and a dependent factor that had 10 questions, the findings showed that; as for cost leadership strategy it was found to be reliable since the value of all eight questions used to measure cost
leadership strategy were more than .7 and the result was .775.As for differentiation strategy, the findings showed that; as for differentiation strategy it was found to be reliable since the value of all eight questions used to measure differentiation strategy was more than .7 and the result was .762. And finally, as for competitive advantage, the findings showed that; as for competitive advantage it
was found to be reliable since the value of all ten questions used to measure competitive advantage were more than .7 and the result was .812.
The researcher attempted to find the correlation between independent variables and the dependent variable. In this research and as it can be seen in the conceptual framework in figure (1), we had two independent variables which are cost leadership and differentiation and on the other hand one dependent variable which is a competitive advantage. The findings of the correlation analysis showed that the P value for cost leadership as independent variable is .723** this value has two-tailed and is more than .05 this indicated
that there is a positive and significant correlation between cost leadership and Carrefour's competitive advantage, on the other hand the research attempted to find the correlation between differentiation and Carrefour's competitive advantage, it was found that the value P for differentiation variable is .628** this value has two-tailed and is more than .05 this indicated that there is a positive and significant correlation between differentiation and Carrefour's competitive advantage.
The researcher intended to find the measure the developed research hypotheses as it can be seen in the conceptual framework in figure (1), we had two independent variables which are cost leadership and differentiation and on the other hand one dependent variable which is a competitive advantage. The developed research hypotheses are stated that; the first research hypothesis stated that there is a significant and positive influence of cost leadership on competitive advantage in Carrefour, and the second research hypothesis stated that there is a significant and positive influence of differentiation on competitive advantage in Carrefour. For this reason, the researcher implemented multiple regression analysis to measure the
research hypotheses, the finding of multiple regression analysis showed that the P value for cost leadership is .000 with the value of B =.718, since this value is greater than .000 and .05 this indicates that there is a significant and positive influence of cost leadership on competitive advantage in Carrefour, as a result, first research hypothesis is supported. As for the relationship between differentiation and competitive advantage, it was found that the P value for cost leadership is .000 with the value of B =.608, since this value is greater than .000 and .05 this indicates that there is a significant and positive influence of differentiation on competitive advantage in Carrefour, as a result, second research hypothesis is supported.
Porter's generic strategies might assist the business to manage to gain and sustain the competitive advantage and be better than other businesses in the industry. Through creating a great number of products, the business will be able to take advantage of the economic scale. The aim of this study is to examine the competitive strategies-cost leadership and differentiation and its influence on competitive advantage in Carrefour-Erbil. Both strategies are working to gain a competitive advantage. The two sorts
differentiation on competitive advantage in Carrefour. For this reason, the researcher implemented multiple regression analysis to measure the research hypotheses, the finding of multiple regression analysis showed that the P value for cost leadership is .000 with the value of B =.718, since this value is greater than .000 and .05 this indicates that there is a significant and positive influence of cost leadership on competitive advantage in Carrefour, as a result, first research hypothesis is supported. As for the relationship between differentiation and competitive advantage, it was found that the P value for cost leadership is .000 with the value of B =.608, since this value is greater than .000 and .05 this indicates that there is a significant and positive influence of differentiation on competitive advantage in Carrefour, as a result, second research hypothesis is supported. The findings revealed that cost leadership is more effective in gaining a competitive advantage at Carrefour Hypermarket and Carrefour supermarket.of the strategies are conflicting in the execution process concerning, decision making, control system, human resource, information system and job design. These internal differences propose both strategies need opposing parts for market study. The researcher intended to find the measure the developed research hypotheses as it can be seen in the conceptual framework in figure (1), we had two independent variables which are cost leadership and differentiation and on the other hand one dependent variable which is a competitive advantage. The developed research hypotheses are stated that; the first research hypothesis stated that there is a significant and positive influence of cost leadership on competitive advantage in Carrefour, and the second research hypothesis stated that there is a significant and positive influence of
This research was supported by ISHIK University. I thank Dr. Fatih Cura, Dean of The Faculty of Administrative Sciences and Economics and Mr. Karwan Hushyar, Head of Business & Management Department who provided insight and expertise that greatly assisted the research, although they may not agree with all of the interpretations/conclusions of this paper. Nobody has been more important to me in the pursuit of this project than the members of my family. I would like to thank my parents; whose love and guidance are with me in whatever I pursue. They are the ultimate role models. Most importantly, I wish to thank my loving and supportive wife, Ms. Kumari, and my only wonderful daughter, Ms. Gnana Satya Sri, who provide unending inspiration.
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