How Different Aspects of the Organization Contribute to Its Competitive Advantage - Dissertation Example

A firm is equipped with a competitive advantage when it has the means to edge out rivals when vying for the favor of customers. In that regard, a firm is considered to possess a competitive advantage by implementing strategies that produce value that is not simultaneously being implemented by any current or potential competitors (De Wit and Meyer, 2005). However, the defined subject of competitive advantage in financial service has a wide existence in the body of literature. The complexity and intangibility of focusing on financial service products that include insurance limited the understanding of the average customer in regards to the features and benefits provided by such service.

This then implies the complexity of identifying and achieving a competitive edge (Barney, 1991).The study of competitive advantage in the field of insurance as an aspect of financial service imposes the process of collecting literature in the context of competitive advantage that is particular to financial service in order to deliberately construct a theoretical model of attributes or features against the perception of the subject of the study, which is the company management to be evaluated.

For instance, Delvin (1997a) had made use of a detailed questionnaire, which he had distributed widely among marketing personnel. The context of the questionnaire delved into the strategy employed by relevant senior personnel in UK retail financial services. Delvin (1997a) investigated the factors which managers emphasize when attempting to formulate strategies to add value to service offerings and, hence, achieve a competitive advantage in services markets. The study was able to conclude that the features and quality of the core service, inclusive of the price, image and reputation, functional service quality, support elements, and location and service recovery are the factors crucial in adding value to service offerings (Delvin, 1998).

In comparison to the findings of Delvin's study, it would be noted that in a study conducted by Gronroos (2001) pertaining to service quality, the latter confirmed the importance of the functional quality on the basis of his perspective, as a very vital factor in order to maintain the gap between the expected service and the perceived service as small as possible. In relating the aforementioned studies to the perspective of insurance, the practice of insurance is based on a mere promise or a guarantee that the customer would be compensated in the event that the insured risk materializes, thus resulting in a loss of damage-causing financial hardship.

In that light, it can be analyzed that the technical quality dimension is obviously a result of the know-how that a specific firm has. However, the availability of technical know-how is not enough (Sekhon and Kenninton, 2001). To ensure that the consumers are satisfied, an acceptable functional quality is demanded; therefore, it must be delivered. It can then be identified that the quality dimensions are interrelated. An acceptable technical quality can be thought of as a prerequisite for a successful functional quality.

Finally, the importance of the image should be recognized.1.2. Significance of the StudyThe importance of competitive advantage cannot be disputed: it is what a company needs to challenge rivals, create loyalty among existing stakeholders, and attract potential customers.