Competitive Advantages Of Learning By Doing

When examining competitive advantage, it is also important to consider the market and take into account the existing competition against larger firms.

2.Competitive Advantage – It includes the best product of an Organization in the competitive market.

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.

Primary assumptions to the theory include, high barriers to entry and exit, high sunk costs and imperfect knowledge of the market. In addition, this paper will analyze the company’s current standing in the market along with competitive strategies executed to grasp a greater portion of market share.

Jobber and Chadwick (2013) discussed that the main two sources of gaining an advantage over competitors are by offering different benefits of the product or deliver it at lower cost than the competition.

•Profitable: one of the key criterions for selecting the above competitive advantages is that the company can introduce them profitably.

There are two different types of competitive advantage: low cost and differentiation. We will develop them in this part I.

3. Collaboration with similar companies in search and development of new products and thereby decreasing the competition for resources within the company.

“There are 2 types of Competitive Advantage. Firms with lower relative cost than rivals have a Cost Advantage. Firms that are able to charge higher prices (have a higher WTP) than their competitors have a Differentiation Advantage. Firms that have both, low cost and high WTP, have Dual Advantage”( Proenca,Jose).

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

Competitive advantage is that a company has better ability in earning profit and profit growth compared to its competitors for the same group of customers in one industry.

Only one firm in any sector or industry can have this advantage (Porter, 1985). The alternate source of competitive advantage is differentiation, this is where the firm "provides something unique that is valuable to buyers beyond simply offering a low price” (Porter, 1985; p120). The firm needs to show that it is different in some way, this may be a product or service characteristics, or may be an intangible aspect such as a firm image or brand (Porter, 1985). The brand is a useful tool that can support the differentiation, by creating the image or association that the consumers will link with the differentiation (Kotler and Keller, 2008). There are many examples; from premium quality brand such as Cartier, to high tech firms such as Apple and mass market brands such as Coca-Cola, in each case the brand has been developed to be associated with specific values and characteristics that help to identify the firm and why it is different (Kotler and Keller, 2008).

The industry in which the company operates can be characterized as monopolistic competition. This is because, since there are no barriers to entry in this industry, threats of entry by potential entrants has made the industry some-what competitive. But the brand loyalty gained by the firms through massive advertising has rendered the firms within

To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The company should develop a strategic advantage over their competitors’

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).