Impvantage And Competitive Advantages In The Business Industry

1487 Words 6 Pages
A competitive advantage is a strategic advantage one business has over its rivals in the industry. Having a sustainable competitive advantage is fundamental to business success in the changing business landscape. This advantage can be achieved through operational strategies such as; New product design, Inventory Management, Technological advances, Quality management and Economies of Scale. These strategies improve a businesses production process. An improved production process will, in turn, result in a business achieving key performance indicators such as speed and quality, consequently becoming a cost leader or product differentiator, expanding the business life cycle. A company must have a clear vision, create goals and have
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This operational strategy involves the creation of new goods and services, typically designed due to innovations in technology and based on the tastes and preferences of a businesses identified target market. There are various steps in this process such as; the initial concept idea of a product, a cost-benefit analysis, the creation of the product, and finally, market testing to gain feedback and an understanding if further changes are needed.
An innovative product enhances a customer’s perception of the product, vital to success in the contemporary competitive business landscape. The new product would be viewed as a superior product, differentiated from previous models or rival products through its higher quality. This differentiation would promote businesses sales and increase the business market share, in turn, increasing profitability levels. Regularly implementing this strategy into the businesses operational process will continually give the business an edge, sustaining its competitive advantage over competitors and consequently leading to higher business
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Technical optimum is the point in which the average cost of production per unit is at its lowest. A large-scale business can reduce its costs through; buying in bulk, negotiating lower interest rates from banks, and specialising labour and transforming resources. These factors scale down business production expenses, in turn making it feasible to sell products at a lower cost, while still maintaining adequate profit margins, consequently undercutting domestic producers. Lower prices are able to be sustained as lower production costs are sustainable, this leads to a business gaining a stable cost

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