Strategies for Incumbents to Gain Competitive Advantage in the Market

Innovation and New
Technologies

Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
Strategies/possible solutions that incumbents can grasp in order to gain competitive advantage............3
One technological innovation strategy/solution in detail for the incumbent to re-emerge in the new
market......................................................................................................................................................5
Innovative and technological components of this solution and if it is a sustaining or disruptive
innovation................................................................................................................................................6
Ways to measure the effectiveness of the solution...................................................................................7
Identify potential difficulties that might be expected for the implementation of that solution.................7
CONCLUSION..........................................................................................................................................8
REFERENCES..........................................................................................................................................9

INTRODUCTION
An incumbent in a business can be defined as a company or product that is established
with a demonstrated level of success in the market. For example, when Bolt introduced its cab
sharing services in the UK market, it posed as an incumbent to companies like Uber, Kapten,
Wheely etc. On the other hand, a challenger can be defined as s company that tries to expand its
share in the market by offering its products in the market at competitive prices (Acs and et. al.,
2017). For Bolt, the challengers are Uber, Wheely and MyTaxi. Incumbents are being beaten by
challengers in business because challengers want to gain the position of market leader in the
industry. This is also because incumbents have a relatively easier access to the different
government resources. They are already established and thus, have a large base of customers
who are loyal and trust them. Challengers are just below incumbents in the market and therefore
aim to increase their market share.
MAIN BODY
Strategies/possible solutions that incumbents can grasp in order to gain competitive advantage
Since an incumbent is a company that is already established in the market, it has access to
various strategies or solutions that it can leverage in order to gain a competitive advantage
against challengers (Van de Ven, 2017). Some of the possible strategies that Uber, being an
incumbent can use are described below –
Cost Leadership – This is one of the strategies that the respective company can use in
order to gain a competitive advantage in the market. In this strategy, the company offers products
or services similar to the competitors at a lower price.
 Reducing Wastage – In this, Uber will try to eliminate competitors out of market by
constantly using different price strategies. Efforts will be made to reduce the wastage.
 Research and Development - Uber must carry out a research in order to find ways of
providing services at lower rates by effectively utilizing the resources available with it
(Four Methods of Competitive Advantages, 2020).
Differentiation – This is the second strategy that incumbents in the UK market can use in order
to set themselves apart from the challengers.