Competitive Advantage

Competitive advantage

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Introduction

The whole idea of competitive advantage requires an ability to seize opportunities when they present themselves. Every company in the 21st-century era is investing heavily in value adding activities that add value to its competitive position. According to Schoemer (2010), competitive advantage is the ability of a firm to be top of a market, superior to all other competitors and producing the most desirable product or service at very low costs. Michael Porter defines competitive advantage as the favour a firm receives about market response as a result of low costs and unique products. This paper aims at reviewing Michael Porter's view and analysis of competitive advantage and the contemporary strategies to gain a competitive advantage so as to contribute to the knowledge of strategic implementation.

Literature reviews on competitive advantage

It may be easy to formulate a strategic plan, but it is the application framework that becomes an issue since it is more of a craft than a science (Hrebiniak, 2006). The early founders of this school of thought include Michael Porter who has been greatly credited for his contribution in business development. Further research has since then been conducted to add to the existing knowledge. According to Schoemer, (2010), the theory of competitive advantage by Michael Porter tries to integrate the basics of comparative advantage by David Ricardo with the business strategies. Michael had his book titled competitive advantage. According to Porter, (1998), Porter gives rise to three generic strategies that enhance the strategic positioning of a company in the market; these include the lowest cost, differentiation, and focus.

Figure 1 Porter 1998 showing the generic strategies of competitive advantage

The can is explained according to Adcock (2000), who stated that a company could outdo its competitors if it is providing the market a product or service of value at more...