Advantages Of Generic Competitive Advantage

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generic competitive advantages for outperforming other corporation in a particular industry: lower cost and differentiation. Figure 3 shows an approach to competitive advantage encompassing critical components.
Figure 3. A typical Approach to Competitive Advantage

2.3 Brief introduction to SWOT, PESTEL and Porter's five forces

SWOT analysis, which inquires in to strengths, weaknesses, opportunities and threats (SWOTs), is the traditional means of searching for insights into ways of realizing the desired alignment (Ansoff 1965; Andrews; 1987; Porter 1991; Mintzberg 1994; Ahlstrand and Lampel 1998). The Stanford Research Institute reportedly used the SWOT analysis during 1960s. This popular management tool that time was known as Satisfaction,
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An additional force i.e., vi) the relative power of other stakeholders is also considered by various management specialists over and above the five forces to suit the changing business environment. A company shall assess the impact of these forces to analyse their growth potential in the market. The higher the influence of each of the forces, the firm loses its ability to earn higher profits. High forces can be regarded as threat as it may affect the potential of the firm to generate profits and a low force can be regarded as opportunity to enhance its profitability. In the long run, a company may choose a suitable strategy to change the strength of one or more forces to company's competitive advantages. Porter's fives forces are used for evaluation of the competitive position of a firm in the industry segment. According to Porter (2008), awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. In contrary to the Porter's five forces, Rumelt (1991) argues that, firm-specific factors are more important to the profitability of a business than industry wide factors.
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