The Concept ofCompetitive Advantage. The concept of competitive advantage has been identified in the present case. According to the concept, efficient managers always try to make additions to their value chains. This addition could be either in the form of lower production cost reflected through low retail prices or in the form of additional benefits without any increments in price.
Competitive advantage could more sensibly be associated with that of a firm or a single industry in a given sector rather than at the macroeconomic level when comparative advantage is the more appropriate one.
It is basically an issue of long-run planning and strategic management. However, it is always necessary to revise the plans that the firm managers make since its rivals are always on the run for duplicating the strategies being applied by the topper.
A large number of models could be applied by any company to gain a competitive advantage over others in the sector. Irrespective of what the models say, there are two basic notions on which they are all based, viz., cost efficiency and quality differentiation.
Model wise, there are a total of six ways through which competitive advantage could be enjoyed, namely – restricting the activities of the competitors, providing services to their customers, economics of the company, efficient management, product upgrades, and good suppliers.
A real-life case study for that of McDonald’s has been included in the paper. The company has been found to be enjoying a competitive edge over its rivals through exploiting its position of being a first-mover in the field of retail marketing.
The primary motive operating beneath the facade of any business enterprise is that of profit maximization. Efficient managers lend their utmost care towards framing business strategies that cater to such issues properly. However, irrespective of the duration of their plans, it is essential to have a core understanding of certain economic theories as well. The .concept of competitive advantage is such a premise that drives the entrepreneurs towards their ultimate target of maximizing gains. .