allow an increase in profitability : should allow the company to have an increase in profitability that at least reaches placed above the average profitability of the sector or market. be sustainable over time : it should be able to stay in the medium or long term; for example, a technology able to adapt to market changes and not one that will shortly become obsolete. be elusive or even : to be elusive or even by the competition; for example, a product difficult to imitate by competitors due to its unique components. The idea of the concept of competitive advantage is that a company must constantly seek obtain, maintain that or those who already have, and make the most of, if you want to achieve a better performance than other competing companies, and thus have a position competitive in the sector or market. There are several ways to gain a competitive advantage, but the two main ones are looking for a cost leadership (a comparative advantage or cost advantage), and seek a differentiation (a differential
Competitive response behavior can be examined in several ways. One of them is by competitive response profiles. Major deviations from competitors’ price levels are possible through significant competitive advantages. The most important advantages of competitive pricing are associated to costs and unique product values. Cost advantages exist when the product can be produced or distributed at a lower unit cost than competitors which resulted from better skills or resources.
Competitive advantage is a term used in the business warzone between commonly large companies that compete to obtain the highest costumer population for their business fields. Competitive advantage is literally an advantage that a company or an organization possesses which enables it to shine brighter than the other competitors in the competition; it is what makes your business unique in comparison to the others. The question now is how? How can you acquire a competitive advantage in the global market? To answer this question, you must first be familiar with three major determinants of acquiring competitive advantage: what to produce, for whom, and with whom you are competing.
The business environment is becoming increasingly competitive, to remain relevant companies need to formulate strategies that are informed by activities and developments in the external environment. Herring (1992) argues that successful strategies are informed by good intelligence concerning the business environment. Intelligence must describe both the current and future competitive environment. Strauss and Du Toit (2010) posit that business strategist increasingly rely on competitive intelligence to increase competitiveness. Competitive intelligence supports the needs of the organisation by gathering, interpreting and disseminating external information.
According to Nellis & Parker (2006), monopolistic competitive markets exist where there are many organisations selling products or services that are comparable, but have slight degrees of differentiation from each other. Nellis et al, further elaborate on the pricing discretion, stating that it is limited and consumers within this market can switch to alternative suppliers according to their needs and desires. (Nellis & Parker. 2006) Nellis & Parker (2006) described the conditions and circumstances that lead to a monopolistic competitive market, these include: 1. A large number of organisations competing: AIC competes against a collective of 93 licensed insurance companies trading.
To do this it needs to have a competitive advantage over its its rivals. A competitive advantage is something a company does better than its rivals that gives it an advantage over its rival. Porter (1988) states that a firm performs many activities that can contribute to a firms relative cost position and create a basis for differentiation which can create a cost advantage that gives a firm a competitive advantage over its competitors. A company’s competitive advantage and competitive strategy are both interrelated. Competitive strategy is defined by Porter (1980) as a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.
Competitive advantage is being run for and more companies are investing in IT in order to reach quality and quantity of goods and services. They are replacing their operating models by using Internet and new software’s. Organizations that are making changes in their sectors by including information technology innovations are gaining competitive advantage. This is called Schumpeterian competition. This turn towards innovations
Competitive advantages are often described as conditions that allow a company to produce a good or service at a lower price or in a more desirable fashion for customers. These conditions allow the productive entity to generate more sales or superior margins than its competition. Competitive advantages are attributed to a variety of internal and external factors, including cost structure, brand, quality of product offerings, distribution network, intellectual property and customer support, as noted by investopedia (2017). Competitive advantage provides companies with an edge over its competitors and an ability to generate better value for a company and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.
Competition law pursues its goals as it prevents agreements restrictive of competition- Horisontal agreements (among competitors), Vertical agreements ( between parties at different levels of the production of distributions chain ), controls market power and its abuse, controls oligopolistic markets and prevents mergers which could be lead to a concentration in market
These products hence cannot substitute each other. In the monopolistic competition, the firm ignores their prices impact on the other firm's product prices while taking the charged price by the rivals just like it's given. In a coercive government, a monopolistic competition falls under a government granted monopoly. In this case, the firm maintains spare capacity. Examples of monopolistic competition include clothing's, shoes, cereals and restaurants and all the service industries in the different