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Understanding Competitive Advantage

Superior performance leads to competitive advantage, which is when a company offers greater value to consumers than its competitors through lower prices for the same product, greater benefits at the same or lower price, or additional benefits at a higher price. Competitive advantage can come from attributes like resources, skilled employees, location, or high barriers to entry. Companies with competitive advantage are usually more profitable than their competitors, and greater profits lead to an even stronger competitive advantage, creating a cycle of success versus failure.

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4 views1 page

Understanding Competitive Advantage

Superior performance leads to competitive advantage, which is when a company offers greater value to consumers than its competitors through lower prices for the same product, greater benefits at the same or lower price, or additional benefits at a higher price. Competitive advantage can come from attributes like resources, skilled employees, location, or high barriers to entry. Companies with competitive advantage are usually more profitable than their competitors, and greater profits lead to an even stronger competitive advantage, creating a cycle of success versus failure.

Uploaded by

Lama Al Hout
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

The result of attaining superior performance will be competitive

advantage. Competitive advantage is an advantage a company has


over its competitors that it gains by offering consumers greater value
than they can get from its competitors. The greater value may be in
lower prices for the same product or service; or it may be in offering
greater benefits and service than its competitors do, thereby justifying
higher prices; or it may be offering greater benefits at the same or
even at a lower price than its competitors charge. Competitive
advantage may be derived from attributes that enable an organization
to outperform its com- petitors such as access to natural resources,
highly-skilled personnel, a favorable geographic location, high entry
barriers, and so forth.

A company that has competitive advantage will usually be more


profitable than the companies it competes with. The higher its profits
are in comparison to its competitors, the greater its competitive
advantage will be. Competitive advantage leads to increased
profitability; and greater profitability leads to increased com- petitive
advantage. Competitive advantage makes the difference between a
company that succeeds and a company that fails.

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