The Practice of Lowering the Cost of Carrying Commodities (Essay Sample)

The Practice of Lowering the Cost of Carrying Commodities 
From a strategic perspective, what are the four major areas in which logistics can create a competitive advantage for a company? Give an example of how a company might use each area
Logistics management is becoming an increasingly important aspect of business operations as companies grow and become more complex. The primary function of logistics is the physical movement of goods and materials, which can provide a competitive advantage to a company in a variety of areas (Hugos, 2018).
Logistics can gain a competitive advantage in four ways: cost leadership, differentiation, defensive strategies, and strategic alliances. In cost leadership, a company can decide to lower the price of the services it provides to its customers. As a result, the company's sales would increase as more customers purchased its products. Again, differentiation is another strategy that would allow the company to earn a lot of money because the service they provide will now be slightly different from that of their competitors, attracting more customers (Lewis, 2019).Furthermore, the use of defensive strategy would be critical in improving the company's competitive advantage because it would allow them to distance themselves from competition, thereby assisting the company in maintaining the firm's competitive advantage. Another way for a company to gain a competitive advantage is to form a strategic alliance with other companies. The process would now allow the merged firms to make the most of their limited resources to ensure success.