Competitive advantage is the ability of the firm or organization to put forth the factors of production with an aim of increasing performance. It is mainly aimed at increasing competition in order to outdo the other rivals in the market (Warf 2007). Firms that embrace competitive advantage embark mostly on implementation of value adding policies, which virtually are not approached by other competitors.
The manager involved in creating competition should invest in technology based production in order to enable timely and efficient results. The data base management and processing will always be fast and efficient, hence enabling the company to have an advantage over other competitors. For example, banking and communication institutions serve many clients within a shorter time through computerization. The other factor that a manager has to consider is the ability to innovate. The leader should invest in research and develop programs that would see them expand their capability of producing the best highly demanded products in the market.
The third factor is the differentiation of the products. This enables the consumers to choose from a wide basket and also helps the company’s products to stand out. These products are said to have different tastes and consequently different prices (Lynch 2009). In addition, the managers are supposed to have access to intellectual property rights such as trademarks and patents. These protect their products legally and no competitor can imitate their products. The managers should ensure good rapport between the clients and the company. Companies that are flexible enough to offer timely support to their customers have an advantage over their competitors, especially in service industries like communication firms.
The economies of scale also help companies to have a competitive advantage over their competitors. This is because they always produce in large capacities which lead to low cost of production hence low cost of products. Low cost of production leads to quite affordable prices (Lynch 2009). The marketing strategy also is a strong factor in competitive advantage. A company that markets itself smartly and vigorously is likely to win public trust since it will be more appealing than their competitors. This may be done through advertising, exhibitions and promotions.
In conclusion, competitive advantage is one of the key ingredients for any business to thrive in the market. Managers should exercise control in order to yield good returns. Competitive advantage and sales are positively related. If a company has competitive advantage over other firms in the same industry, it is likely to have higher sales than their counterparts. Therefore, managers should strive to maintain the competitive advantage of their firms in order to enhance increased customer base and high profits.
References
Warf, F (2007). The World Economy: Resources, Location, Trade and Development (5th. ed.). Upper Saddle River: Pearson.
Lynch W (2009). Comparative Advantage: Creating and Sustaining Performance. London. Port Bay.
