Introduction
What is Competitive Advantage?
A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.
Nevertheless, CA is temporary because competitors keep duplicate the strategy. Thus, company must always devise a new plan for gaining a competitive advantage.
The Five Forces Model
Michael Porter’s Five Forces Model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment.
The Value Chains - Targeting Business
Processes
Supply Chain - a chain or series of processes that adds value to product & service for customer. Adds value to its products and services that support a profit margin for the firm.
Supply Chain Diagram
A
chain or series of processes that adds value to product & service for
customer.
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