The framework helps you understand where your competitive advantage comes from and so it can be useful in guiding future strategy. Think of restaurants, printers, engineering jobbing shops and the like, all of them with loyal customer bases. Typical examples are large consumer goods companies such as Unilever and Procter & Gamble who use their size to obtain advantages of low-cost as well as consumer pull through their brands.įragmented business: these companies don't have size on their side but they are able to differentiate and win a competitive advantage through playing in a niche. branding) to win a competitive advantage. Specialised business: these companies have volume and they also are able to take advantage of differentiation (i.e. These companies have much less opportunity for achieving a competitive advantage than others in the matrix. They may, for example, choose to relocate their business to a country with low cost labour. Because they don't have economies of scale like the automotive companies, they have to find some other means of gaining a competitive advantage. Stalemated business: traditional companies such as those making textiles also seek to reduce their costs as much as possible.

They are capital intensive businesses whose ability to compete depends very much on how good they are at managing their costs. Volume business: these are companies such as automotive manufacturers who seek to compete by efficiencies achieved with their massive production runs.

Bcg competitive advantage matrix