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Competitive advantage

Marketing

Competitive advantage (CA) mainly gains by Cost leadership or Differentiation or both. Generally competitors always try to reach the rival’s CA to make there product(s) competitive. Sometime their effort is not reachable due to environmental, technical or other advantage. Therefore, advantage sustain for a long period of time. At that case, it calls Sustainable Competitive Advantage (SCA). Cost leadership is a CA because of cost focus seekers, who aim to obtain a local cost advantage over competition and differentiation focuser, who are looking for a local difference. The primary factors of competitive advantage are innovation, reputation and relationships. Competitive advantage occurs when a organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources, such as high grade ores or inexpensive power, or access to highly trained and skilled personnel human resources. New technologies such as robotics and information technology either to be included as a part of the product, or to assist making it. The term competitive advantage is the ability gained through attributes and resources to perform at a higher level than others in the same industry or market (Christensen and Fahey 1984, Kay 1994, Porter 1980 cited by Chacarbaghi and Lynch 1999, p.45). The study of such advantage has attracted profound research interest due to contemporary issues regarding superior performance levels of firms in the present competitive market conditions. “A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential player” (Barney 1991 cited by Clulow et al.2003, p.221). Successfully implemented strategies will lift a firm to superior performance by facilitating the firm with competitive advantage to outperform current or potential players (Passemard and Calantone 2000, p.18). To gain competitive advantage a business strategy of a firm manipulates the various resources over which it has direct control and these resources have the ability to generate competitive advantage (Reed and Fillippi 1990 cited by Rijamampianina 2003, p.362). Superior performance outcomes and superiority in production resources reflects competitive advantage (Day and Wesley 1988 cited by Lau 2002, p.125).