It is understood that functional level strategies that focus upon the company’s ability to attain superiority in terms of Efficiency, Quality, Innovation, and finally Customer responsiveness lead to increased utility derived by the consumers from the product by able active differentiation, creation of greater value through creating a lower cost structure that enables same quality at lower prices or vice versa compared to rivals and thereby succeeds in achieving competitive advantage (Hill and Jones, 1995). So, it is recognized that gaining a competitive advantage for any organization crucially depends upon generating the ability to provide the customer with relatively greater utility in the product. Again, customer responsiveness is defined as “giving customers what they want, when they want it, and at a price they are willing to pay – as long as the company’s long-term profitability is not compromised” (Hill and Jones, 1995). The most important elements of customer responsiveness are essential, the ability to customize goods and services according to the individual requirements of the customer, fast order response times, superior quality and design as well as superior after-sales service and support (Hill and Jones, 1995, p.110).
Therefore if we interpret gaining competitive advantage as the attainment of success in gaining and maintaining status as a forerunner in the race to provide the customer with greater utility we see how intrinsically related it is to the success in gaining customer responsiveness and how mutually dependent these two concepts are. It has been in fact realised that customer responsiveness is ultimately the most important basis of attaining and maintaining competitive advantage especially in the modern times characterised by intense multidimensional competition the extent of which keeps on surmounting by the day. The other factors of competitive advantage, i.e, efficiency, quality, innovation essentially contribute to enhancing the effect of customer responsiveness and service provided by the organization through improving the value for the customer (Muller, 1991).