Competitive advantage and relationship marketing

Competitive advantage and relationship marketing Introduction The ability of an organization to generate and maintain a competitive advantage forms one of the most critical elements in supporting its internal and external mechanisms for further growth and expansion. Benderly posits that high market competitiveness acts as an indicator of an organization’s progress and assessment in comparison to others dealing with same products (30). Besides, as this paper analyzes using Cirque du Soleil, relationship marketing is an effective means of maintaining, developing and establishing market relationship with consumers. It has been hailed as one of the most effective ways through which businesses can achieve and sustain competitive advantage. Competitive advantage The concept of competitive advantage has its roots well entrenched in the historical era of industrial revolution when demand for markets and increasing focus on quality became critical.Advertising We will write a custom critical writing sample on Competitive advan tage and relationship marketing-Cirque du Soleil specifically for you for only $16.05 $11/page Learn More However, Suliyanto and Rahab indicate that the concept became more profound with the development of globalization and intensification of international trade which further diversified its overall scope in view of production and consumption of different products and services (136). The concept of market competitiveness has further been intensified by the onset of information technology which strongly links market with the management and production units in the society. In his article Anatomy of competitive advantage: a select framework, Ma points out that â€Å"competitive advantage arises from the differential among firms along any dimension of firm attributes and characteristics that allows one firm to better create customer value than do others† (709). His argument hinges on the view that consistent provision of superior value and high quality products to consumers is an attribute determined by a firm’s ability to establish strategic business decisions as well as strategic capabilities. Due to intensive competition and increasing uncertainty, companies that have sustainable advantage make tremendous gains because they have competencies and resources that are non-substitutable and unique that their competitors lack. Agha, Alrubaiee and Jamhour concur with Ma’s argument and posits that through these, successful organizations have maintained customer satisfaction, achieved overall strategic goals and increased their production processes (200).Advertising Looking for critical writing on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Additionally, capabilities have these companies have been witnessed in the manner in which they have combined organizational knowledge, integrated technology and coordinated production skills in provision of value. Aremu and Bamiduro point out that the affect of relationship marketing in developing and sustaining competitive edge has from ancient times grown to become hyper-competitive through established relationships between suppliers, buyers and sellers (211). Different businesses have for along period of time developed unique and different customer relationship capabilities that have aided them in gaining a competitive edge over their competitors. This relates with Ma’s argument in the sense that the uniqueness of a firm in carrying out relationship marketing is an attribute which adds customer value. However, it is imperative to note that an inception of great directional change has been witnessed in the past decade in both marketing practice and theory. David and Motamedi point out that this genuine paradigm shift has been termed by marketing analysts as a move towards relationship marketing which as a concept encompasses relational marketing, working partnerships, relational contracti ng, co-marketing alliances, strategic alliances, symbiotic marketing and internal marketing (369). Their argument, which adds another angle to Ma’s position, indicates that competitive edge can also be attained through partnerships. In fact, currently in global business, the practice of predatory and flat out competition is over and has been replaced by collaboration between companies both at local and multinational level as gaining a favorable competitive edge requires that businesses cooperate. Lyndall Urwick, an influential thinker and consultant in business management argued from the business reengineering theory’s perspective that relationship marketing is a shift adopted by businesses intending to establish long-term relationships that are mutually satisfying with key-parties such as distributors, suppliers and customers for mutual gain and to retain them in their businesses.Advertising We will write a custom critical writing sample on Competitive advanta ge and relationship marketing-Cirque du Soleil specifically for you for only $16.05 $11/page Learn More His argument echoes Ma’s argument on competitive advantage in the sense that relationship marketing creates a mutual bond that connects a company with suppliers, distributors and customers while ensuring that they all benefit. However, the uniqueness of attributes and characteristics must not be different for a company to gain a competitive edge because relationship marketing also extends to partnerships with other business to gain resources and boost performance. Gilaninia, Shahi and Mousavian point out that effective relationship marketing companies have arisen within functionally specialized organizations, and have networks whose interrelationships are not only driven by norms, but are coordinated and held together by organizations whose marketing methods are based on trust, commitment and sharing. Cirque du Soleil Cirque du Soleil is one of the fastest growing entertainment companies in Canada based in Quebec (David Motamedi 369). Its unique attribute in relationship marketing has been one of the most notable core competencies that have made it successful since its inception in 1984. As an entertainment company, it has been able to achieve some stable competitive edge via building of its customer loyalty through provision of quality shows, products and services. It is worth noting that building customer loyalty and retention has been identified by many scholars and practitioners in relationship marketing as a major requirement in successful selling and building of brand or image of a business. David and Motamedi points out that Cirque du Soleil has invested in developing strategies for creating customer loyalty and retention through its effective leadership properly so that it does not miss out on significant marketing share against other market competitors (370). The latter explains why it is putting more emphasis in building e ffective communication strategies for the purpose of developing customer confidence, retention as well as loyalty.Advertising Looking for critical writing on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It has been able to retain its customers by developing an effective and efficient visionary planning as well as strategic customer relationship management in order to eliminate weak customer relations which often lead to dysfunctional organizational behavior and low profitability. In their publication, Patsioura, Malama and Vlachopoulou point out that recognizing factors that motivates customers to buy products or services is an important step in understanding the brand switching behavior of customers as well as their loyalty (80). Most customers of Cirque du Soleil have shown their loyalty to this company through repeat purchase of their entertainment services, preference and commitment to their shows. Kaj Storbacka, Tore Strandvik, and Christian Grà ¶nroos point out in their loyalty business model that when there is lack of relationship marketing, customers may fail to be satisfied by products and services and hence be unsuccessful in showing important components such as an inten tion to re-buy, a liking towards a brand preference due to superior qualities of a brand (Croteau, Rivard Talbot 1). However, customer loyalty and retention can be realized in a business environment where strategic relationship marketing is unique and differentiated and where it is being done with the help of effective communication to obtain feedback. Cirque du Soleil has been very effective in applying various unique relationship marketing methods which include the use of technology and social media marketing as a viable relationship marketing tool largely due to its flexibility and viability in reaching out targeted market (Croteau, Rivard Talbot 1). Relationship marketing through improved quality of goods and services Attainment of a competitive edge has been considered to have massive implications on products and services being released to consumers in the market. As Dickinson indicates, the notion of market competitiveness is laden with a sense of high quality products in the society (10). With the notion of increased products value being progressive, consumers enjoy high quality products and services at all times and at the correct prices. Due to the need to maintain high quality services in the nation, Cirque du Soleil has sought to expand to other regions in the world as part and parcel of seeking new markets and expanding its level of operations and therefore improve the degree with which the various needs of its customers can be met. It has also done this with an intention of maintaining its status amidst the fast growing industry (Croteau, Rivard Talbot 1). Relationship marketing assists in building greater customer loyalty In their view, Aghoubi, Doaee and Ardalan observe that the relationship marketing practice of a business in the global market acts as a critical tool for maintaining loyalty of the customers on products and services an organization offer (903). The ability of an organization to initiate, effect, and maintain market competitivene ss in its different areas of operation act as one of the most critical elements in supporting growth of loyalty by consumers through continuous services improvement. As indicated earlier, gaining competitive advantage is a notion that goes hand-in-hand with provision of high quality that consumers seek association with. Most management teams in organizations often seek to generate high customer loyalty in their products (Roy 80). Following its long time competitive advantage in Canada, Cirque du Soleil has assimilated sound customer loyalty from its entertainment customers. Its management team emphasizes that its ability to remain at the top has been anchored on high customer loyalty in all of its global operations (Croteau, Rivard Talbot 1). To recap it all, it is imperative to reiterate that the discussion in this paper has been based on the thesis statement that â€Å"the ability of an organization to generate and maintain a competitive advantage forms one of the most critical e lements in supporting its internal and external mechanisms for further growth and expansion†. From the discussion, it is evident that developing unique and differentiated competitive advantages such as effective relationship marketing, customer responsiveness, influence and communication are generic and vital for an organization that wants to succeed in the global competitive market. It is also clear from the discussion that other capabilities which companies should develop to lead in the market include innovative capacity, strategic flexibility, organizational learning and effective technology among others. It is worth noting that different authors have stated that a business needs to have a unique and differentiated capability to gain competitive advantage over others. However, as indicated by authors with different views, market trends have massively changed and businesses are going into partnerships and networks to augment their competitive advantages over others. The pape r has also examined Cirque du Soleil relationship marketing practice and noted that successful adoption of relationship marketing in the organization has enhanced its ability to establish long term relationships with its customers. Agha Sabah, Alrubaiee Laith Jamhour Manar. Effect of core competence on competitive advantage and organizational performance. 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