Competitive Advantage Research Paper Example | Topics and Well Written Essays - 1000 words - 1

Competitive Advantage - Research Paper Example From the essay it is clear that competitive advantage is likely to be achieved through different avenues that include the offering of superior quality products or services. Some of these practices involve the lowering of prices as well as raising the efforts in the market. A competitive advantage that is sustainable is one that maintains a favourable position above others over a long period of time which is vital in boosting its image in the marketplace. Furthermore its valuations together with future earning potentials are also put into consideration. As the discussion stresses competitive advantage is divided into two, namely comparative advantage (also known as cost advantage) as well as differential advantage. Comparative advantage is the capacity of producing good products or services at lower costs that business rivals. It gives a business firm the propensity to selling goods along with services at relatively reduced prices in comparison to the competition or generating large sale margins. Differential advantage on the other hand is founded when the products or services of a firm differ from those of the competitors and are perceived as better compared to those of the competitors. Organizations in high PDs are centralized with strong hierarchies and big gaps in terms of compensation and authority, while low PD places supervisors as well as employees are seen as equal. In the former, it is important to acknowledge authority of leaders and the latter requires one to employ teamwork.