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Competitive Advantage Assignment Help

Porter defined the two types of competitive advantage in 1980 that an organization can achieve relative to its rivals: lower cost or differentiation. This advantage derives from attributes that allow an organization to outperform its competition such as skill, superior market position or resources. According to Porter, strategic management should be concerned with sustaining and building competitive advantage. It is an advantage that a firm has over its competitors. This allows greater sales or margins or retains more customers than its competitors. There can be many types of competitive advantage that include product offerings, the firm’s cost structure, distribution network and customer support. There are two main types of competitive advantage- comparative advantage and differential advantage. Comparative advantage is a firm’s ability to produce a good or services at a lower price than its competitors or to generate larger sales. The differential advantage is created when a firm’s services or products differ from its competitors and are seen as better than a competitor’s products by consumers.

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