Competitive Advantage By Michael Porter

3. According to the Investopedia, “Competitive advantage is an advantage that a firm has over its competitors, allowing it

On the other hands, competitive advantage is described as the advantages such as technology, human resources or any other elements that help the firm outperform their competitors (Burns, 2008). Competitive advantage is a dominant factor affecting the enterprise business, particularly the profit that the firm can gain. Combining these two terms together, it is clear that the more competitive advantage the company has in the long-term, the more success the firm can be in such a fierce international competitive

Competitive advantage exists when a firm has strategy, product or an attribute that makes the firm capable of delivering similar benefit to that of competitors at a cheaper cost. Having competitive advantage is not enough the company should be capable of sustaining that particular competitive advantage for a longer period of time.

They are given meaning in the minds of managers through processes of selective attention and simplification (Pfeffer and Salancik 1978). Otherwise managers could not possibly cope with the myriad of trends and events that must be organized, analyzed for patterns, and acted upon. Managers therefore adopt a customer-focused or competitor-centered perspective to help simplify their environment and decide what information is to be gathered and how it is to be screened and interpreted. Simplification comes at a cost, which is the risk that only a partial and biased picture of reality is created. A competitor-centered perspective leads to a preoccupation with costs and controllable activities that can be compared directly with corresponding activities of close rivals. Customer-focused approaches have the advantage of examining the full range of competitive choices in light of the customers ' needs and perceptions of superiority, but lack an obvious connection to activities and variables that are controlled by management. Clearly a balance of the two characteristic perspectives is needed. In practice most businesses tilt—in some cases very sharply—toward one or the other. A significant complication in the search for a balanced p>erspective is the confusing welter of overlapping meanings of "competitive advantage." Because there is no agreement on what elements to include or how they are related, information gaps cannot be identified. We address this

Competitive advantage – competitive advantage is the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors. The four building blocks of competitive advantage are superior efficiency, speed, flexibility, innovation, and responsiveness to customers.

To survive and thrive, an organization must create a competitive advantage. A competitive advantage is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage. In turn, organizations must develop a strategy based on a new competitive advantage.

Key Terms in Strategic Management Competitive Advantage Anything that a firm does especially well compared to rival firms ~ Strategic management is gaining and maintaining competitive advantage Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -19 4. Key Terms in Strategic Management Achieving Sustained Competitive Advantage 1. Continually adapting to changes in external trends and events and internal capabilities, competencies, and resources 2.

Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland III, A. (2012). Crafting and executing strategy the quest for competitive advantage concepts

Through an internal environment analysis, companies can identify and understand their own unique resources, capabilities, and competencies that are required for their sustainable competitive advantage. Resources, capabilities, and core competencies are the foundation of competitive advantage. There is no competitive advantages are permanently sustainable in any companies, so they have to consist on their current advantages and develop new advantages by internally understanding and analyzing their resources and capabilities. Competitors have their own unique resources, capabilities, and core competencies to create values for their customers. Both tangible and intangible resources, which include individual, social and organizational phenomena, are combined to generate capabilities. In turn, company’s capabilities are used to build core competencies. Also, core competencies are as a source of competitive advantage for a company to win in the competitive market.

Competitive advantage is the point of power for any organization as it is the point from which an organization can maximize it's profits if it's been planned for it well .

1. What is competitive advantage, and how does it relate to a company’s business model?

Competitive Advantage: Creating and Sustaining Superior Performance, by Michael E. Porter. Author focused on three principle strategies that a firm can use to neutralize competition areas. low cost differentiation products, superior performance, and competitive technology. The profit potential of any organization can be truly determined by total 5 competition areas. 1 Jockeying for a position, 2 new competitors 3 substitute products/services threats 4 Raw materials power of suppliers 5. Organization customer bargaining power. Value chain is a tool that can be used to analyzing large number of value producing activities to determine customer segment need. Competitive advantage through low cost focus on ten major factors; economics, learning, capacity utilization, linkage within value chain, business interrelationships unit, vertical integration, Business cycles timing purchases, discretionary policies, location, and institutional factors. Two main area an organization achieve cost advantage is controlling cost drivers and two

Competitive advantage(CA) is an advantage competitors gain by providing or offering customers or consumers greater value for their money through product and service differentiation or through lower prices. Maintaining competitive advantage is crucial to many businesses or organizations' success in order to survive in the market. Competitive advantage is characterized by superior performance which could be an attribute to outperform the competitors whether current or potential; or gaining a higher market share in a particular industry thereby ensuring market leadership; or ultimately, maximization of profit.(JOBBER 2010)

Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. Competitive advantage should be relevant, unique and sustainable. Therefore sustainable competitive advantage, it’s a long-term competitive advantage that a company own over others in the same sector that is not easily duplicated or surpassable by its competitors (wikipedia, 2009). Competitive advantage can also be seen as a superiority gained by an organization when it can provide the same value as its

Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).