Defining competitive advantage


Assignment:

Define competitive advantage, sustainable competitive advantage, competitive disadvantage, and competitive parity.

  • Competitive advantage is always judged relative to other competitors or the industry average.
  • To obtain a competitive advantage, a firm must either create more value for customers while keeping its cost comparable to competitors, or it must provide the value equivalent to competitors but at a lower cost.
  • A firm able to outperform competitors for prolonged periods of time has a sustained competitive advantage.
  • A firm that continuously underperforms its rivals or the industry average has a competitive disadvantage.
  • Two or more firms that perform at the same level have competitive parity.
  • An effective strategy requires that strategic tradeoffs be recognized and addressed—for example, between value creation and the costs to create the value.

Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.

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Business Management: Defining competitive advantage
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