Consumer Preferences

Consumer Preferences Consumer Preferences Home›Economics Posts›Consumer Preferences Economics PostsCompetitive advantage refers to the situation in which a firm is able sustain its profits that are more than the average profits for its industry. Due to the existence of so many different companies in the global markets, a company needs to do something that will put it one more step a head of others in order for it to register more profits. It has to make sure that it has something to offer to customers that other competitors don’t have in order to have a great command in the market. This is what is known as competitive advantage.A very good example of the changes in consumer preferences as a result of competitive advantage is the changes in quality of the automobiles in the market. In the early times and for a long time the Peugeots controlled the automobile industry. They were the most preferred vehicles by the people than any other type of vehicles. But they had some disadvantages which include t he fact that they were too expensive to purchase and they consumed a lot of fuel. Consumers never liked this.Later the Japanese came up with a model of vehicles called Toyotas. The Japanese Toyotas were cheap as compared to Peugeots and their fuel consumption was low as compared to the Peugeots. Many people rushed into the market to buy the Toyotas at the expense of the Peugeots which looked expensive to them. Thus they changed their preference in favor of the Toyota vehicle. In turn the Toyota Company made more profits than their competitors.Another example is the introduction of the mobile phones in the telecommunication industry. The emergence of mobile phones saw the introduction of early phones like the Alcatel, Samsungs and Nokias which fully and competitively controlled the market. These types of mobile phones had major characteristics such as presence of long antennae; they were expensive and heavy too. As a result of stiff competition in the market, the Nokia Company went b ack and restructured its models.It made models that were less heavy (portable) with smaller or no antennae, smaller in size and cheap to buy as compared to other products from other companies. The customers preferred more of these new Nokia models than those of other companies. Thus they bought more of them and in turn Nokia Company made extra profits and acquired larger share of the market than there competitors. Hence, the concept of ‘consumer preferences and competitive advantage’