Definition
Competitive advantage refers to a situation where one organization in the industry develops or acquires combined attributes which allow it to be in a better position than its competitors in terms of performance and suitability. Some of these attributes that can boost a company to have a competitive advantage may include natural resources, skilled personnel, new and better technologies, inexpensive power, political support among many more others. When a company has this advantage, it becomes difficult for other companies to rival and compete with it. As such, it gets a chance to expand its operations in the industry.
History of the term
The concept of competitive advantage was first applied in the year 1980 (Fulmer et al. 43). This term was developed by Michael Porter in the mid-1980. According to Porter, the theory was as a result of the Comparative Advantage Law, which David Ricardo developed in the 18th century. Porter was a professor in Harvard University in the School of Business. According to his analysis, the Comparative Advantage theory was likely to lead to specialization in the export of primary goods. Porter’s concept was motivated by the urge to develop a resource-based approach that companies would manipulate for their advantages. His conclusion was that a company gets a competitive advantage over its rivals when its resources and capabilities prove to be more superior to those of the competitors, ensuring that the company in question can deliver goods of superior quality. To date, this term is commonly used in the field of business.
Etymology of the term
The origin of this term is unclear. This is despite the wide believe that the concept was developed by Michael Porter. According to experts, this term emerged in the early 80s when some companies would take advantage of their strong financial positions to offer to customers quality services so as to retain their loyalty. This approach has since evolved from a mere financial position. In the early 90s, the definition was expanded to include any form of advantage that puts one company in an advantageous position. In the modern society, the use of this term is very common (Porter, 35).
Reflective memo
The extended definition of the term ‘competitive advantage’ is based on my analytical report for the purposes of my studies. The report seeks to give an insight to competition in businesses and how some companies have developed an unfair advantage at the expense of the competitors. One of such advantages is the competitive advantage where companies win the loyalty of customers for their consistency in providing quality products.
In essence, this term is very significant in my analytical report. The Competitive advantage concept requires a thorough understanding to avoid confusion when discussing this issue. There is need to define this term because of the significant role it plays in understanding my report. The fact that I seek to address a wide audience means that some of them may not be in a position to understand the concepts involved. By defining it, the audience will have a clue on what the research is all about. Because of this, my definition of the term is tailored to ensure the entire audience understands what the issue is all about.
In my page design, I employ a simple and common approach, whereby I use bold headlines. This is essential in attracting the audience. My titles are centered, and I use the standard font, that is, Times New Roman, font 12. This because a simple approach that is consistent is good in giving definitions that are technical.
Works Cited
Fulmer, Robert M, and Jay A. Conger. Growing Your Company's Leaders: How Great Organizations Use Succession Management to Sustain Competitive Advantage. New York: AMACOM, 2004. Print.
Porter, Michael E. The Competitive Advantage of Nations. New York: Free Press, 1990. Print.
