Corporate Philanthropy

TABLE OF CONTENTS

4.6 The Competitive Advantage of Corporate Philanthropy

4.6.1 Definition

4.6.2 CSR and Corporate Philanthropy

4.6.3 History of Corporate Philanthropy

4.6.4 Nature of Corporate Philanthropy

4.6.5 Motives for Corporate Philanthropy

4.6.6 Advantages and Disadvantages of Corporate Philanthropy

4.6.7 Recommended Practices for Corporate Philanthropy

The Competitive Advantage of Corporate Philanthropy

Definition

Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment. (Wikipedia)

It is an advantage that firms has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support. (Investopedia)

Competitive advantage gives a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.

There are two main types of competitive advantages: comparative advantage and differential advantage. Comparative advantage, or cost advantage, is a firm's ability to produce a good or service at a lower cost than its competitors, which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. A differential advantage is created when a firm's products or services differ from its competitors and are seen as better than a competitor's products by customers.

CSR & Corporate Philanthropy

“To stay in business we have to make a profit. To succeed in business, we have to share some of that...