Competitieve Advantage

Competitive Advantage

Competitive advantage its said to be when a firm “does better” than the others, because they either have access to special resources that others do not, or they are able to use commonly available resources more efficiently, usually because of superior knowledge and information assets (Laudon & Laudon, 2007). We will describe the rise and falls of the automobile industry, focusing on Ford and GM; Coca Colas and Apple’s approach and risks taken that keeps them at an advantage over similar brands.

Michael E. Porter is a leading authority on competitive strategy, the competitiveness and economic development of nations, states, and regions, and the application of competitive principles to social problems such as health care, the environment, and corporate responsibility. He is generally recognized as the father of the modern strategy field, as has been identified in a variety of rankings and surveys as the world’s most influential thinker on management and competitiveness. He identified two basic types of competitive advantage:

* Cost Advantage

* When a firm is able to deliver the same benefits as competitors, but at a lower cost (Competitive Advantage, 2010)

* Differentiation Advantage

* Deliver benefits that exceed those of competing products (Competitive Advantage, 2010)

There are different ways firms can achieve advantage over other firms like (Laudon & Laudon, 2007):

* Barriers to entry that restrict supply

* Having a monopoly or a near monopoly on supply

* Demand Control

* Strong brand name with superior qualities and has become in a way the norm of use

* Economies of Scale

* “Outsourcing”

* Process Efficiency

Process efficiency is having a good management team that implements a competent way of doing businesses all around the world. Michael Porter created the Competitive Forces Model. It provides a general view of the firm, its competitors, and the firm’s environment (Laudon &...