Competitive Advantage

Competitive Advantage

By: Krishan Mishra
1

What is Competitive
advantage?
– … a basis for the firm’s long term
success?
– … a basis for value creation?

• Do we really know where it resides?
• Can it be sustainable?
2

What is Competitive
advantage?
“When two or more firms compete
within the same market, one firms
possesses a competitive advantage
over its rivals when it earns a
persistently higher rate of profit (or
has the potential to earn a
persistently higher rate of profit)”
R. M. Grant, 2000
3

The main types of
Competitive
Advantage

Competitive
Competitive
advantage
advantage

la r s t
i
Sim durccto
ro
we
plo
at

Cost
Cost advantage
advantage

Hi
gh
for
er
un
iqu pric
e
ep
ro
du Differentiation advantage
ct Differentiation advantage

4

Features of competitive
strategies
Cost Leadership

Differentiation

 Efficient scale
 Standardization
 Design for low
production cost
 Control of
overheads and R&D
 Avoid marginal
customers

 Quality
 Innovation
 Design
 Credibility
 Brand name
 Reputation
 Environmental
posture
 Customer service
 Integrated services
5