Value-Based Competitive Advantage in the Finnish Welding Equipment Market

The competition in industrial markets in general has become intense and fierce. Supplier companies are increasingly facing difficulties in differentiating their market offerings in the minds of customers. New ways of creating competitive advantage are sought after, and the notion of customer value is gaining in importance. It has been recognized that understanding the way in which customers judge and value suppliers' market offerings is crucial for achieving competitive advantage (Graf & Maas 2008, 2). This study contributes to the understanding of customer value in business markets, especially in the Finnish welding equipment market. It provides valuable practical implications for welding equipment suppliers about chances to benefit of the customer value concept when striving for competitive advantage. This study applies general theories of competitive advantage and customer value in business markets. The purpose of this study is to explore and to analyze customer value drivers in the Finnish welding equipment market, and to discuss how these value drivers relate to the competitive advantage of welding equipment suppliers. A customer value approach is used in order to assess by which means a supplier's market offering can best meet customers' requirements. A qualitative approach was used to conduct this study. The data was gathered in 13 semi-structured phone interviews with welding equipment buyers from various fields of engineering. The data was analyzed in relation to the existing theory, relying on the notion that customer value is a subjectively perceived, multidimensional construct. During the analysis, it was identified that customer value in the Finnish welding equipment market consists of 16 different value drivers which can be categorized under economic, product-related, service-related and relational benefits. Customer companies, however, have diversified preferences and requirements guiding their selection of welding equipment suppliers. The most difficult task for a supplier is to decide which value elements and which customer segments to concentrate on. Based on the analysis, the key to achieve competitive advantage in the Finnish welding equipment market is on identifying the service gaps and providing customers with improved service and relational benefits. The chances for a supplier to succeed in competition can be increased by providing service elements for those customers that currently lack it and making the interactions personal. Asiasanat:customer value, value driver, competitive advantage, welding supply industr