The Management of the Competitive Differentiation of Companies that Supply Electromechanical Equipments for the Oil Industry

Let us assume that the supplier ofelectromechanical devices for the oil industry hasalready selected its target market. When it is the onlysupplier for that market, it will be able to sell at a pricethat would bring it considerable profit. If the price istoo high and there are no entering barriers forcompetitors, the latter will penetrate the market andcause a lowering of the prices for theelectromechanical devices. When the same market isprovided by companies that produce non-differentiateddevices, buyers will choose the company that sells atthe lowest price. Consequently, the other companieswill have to lower the price as well. The onlyalternative for the supplier oil electromechanicaldevices is to differentiate its offer. If this action issuccessful, it will be able to practice a higher price,due to the superior quality that is being offered. Thereare four ways of defining an offer: the agent that sellsoil products can create value by offering products thatare [1]:- Better - the offer can better satisfy the needs ofcustomers than that of competitors, whichusually involves at least a minimumimprovement of the electromechanical device:- Newer – providing a solution that does not existso far, which implies a higher risk than in thesituation mentioned above, but can bring ahigher profit- Faster - the delivery time for anelectromechanical device is reduced- Cheaper – the product is identical with thatoffered by competitors, but the price is lower