World Politcs and Polices

Course Work For Business Strategy 2010/2011 Competitive Advantage Qn2a When a trustworthy sustains profits that exceed the average for its industry, the firm is tell to possess a war-ridden expediency over its rivals. The intent of much of business strategy is to achieve a sustainable matched proceeds. Michael Porter identified two basic types of competitive advantage: * cost advantage * speciality advantage A competitive advantage exists when the firm is able to forgo the same benefits as competitors just now at a lower cost (cost advantage), or deliver benefits that exceed those of competing products ( differentiation advantage). Thus, a competitive advantage enables the firm to wee master value for its customers and superior profits for itself. Cost and differentiation advantages atomic number 18 known as positional advantages since they describe the firms position in the industry as a attraction in either cost or differentiation. A resource-based see to it emphasizes that a firm utilizes its resources and capabilities to create a competitive advantage that ultimately results in superior value creation.

The following diagram combines the resource-based and positioning views to illustrate the concept of competitive advantage: A Model of Competitive Advantage Resources| |  |  |  |  | Distinctive Competencies| | | Cost Advantage or Differentiation Advantage| | | Value humankind| | Capabilities| |  |  |  |  | Resources and Capabilities According to the resource-based view, in revise to develop a competitive advantage the firm must have resources and capabilities that are superior to those of its competitors. Without this superiority, the competitors simply could replicate what the firm was doing and any advantage quick would disappear. Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. The following are some examples of such... If you want to get a full essay, order it on our website: Orderessay

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