Question

Instructions: Answer the following prompt - How can a company measure its competitive advantage? How does a firm know if it is gaining or losing competitive advantage? Cite a global company and its source of competitive advantage.

Answer 1

Competitive advantage is the business ability to provide the similar set of products or services as compared to the competitive businesses or organizations at a lower prices or by differentiation with higher product quality. For example, Puma, Adidas and Nike compete in the similar sports clothing and shoes industry. Thus, an organization gains a competitive advantage in the market place by competing through cost or through higher quality product (e.g. niche product or differentiated innovative product). It becomes a perfect match among organizational distinct competencies and critical success factors. In order to measure the competitive advantage or it is gaining or losing competitive advantage, it is better to assess the customer’s perception and also how the competitor’s products performing in the market in terms of cost and quality. For example, Different mobile brands (Xiomi, Samsung, etc.) for the Android smart phones. Nokia could not sustain the market.