Strategy and its importance for competitive advantage

Another strategy, derived from an external perspective, was devised by a U. Two companies can offer a similar physical product, but the company that offers additional services can charge a premium for the product. Inputs can be reduced in many ways.

competitive advantage strategies

A firm can achieve cost or differentiation advantage when it develops VRIO resources, unique competences or through innovative processes and products. It rightfully has earned its place in the business strategist's core collection of strategy books.

Yet, a competitor may not be able to distinguish if the advantage is due to superior materials, equipment or employees. As treasurers struggle to estimate capital needs and trade off alternative financing plans, they and their staffs extrapolate past trends and try to foresee the future impact of political, economic, and social forces.

Teamwork on task force projects is the rule rather than the exception in strategically managed companies. The firm that can achieve the highest efficiency for the same service or product can widen the gap between cost and perceived value and may have greater profit margins.

When these factors change many opportunities arise that can be exploited by an organization to achieve superiority over its rivals.

what is competitive advantage and why is it important

A recognizable CEO can make a company stand out.

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Competitive Advantage