1. What is competitive advantage and why does it matter?
2. Discuss Michael Porter's Five Forces Model, detailing how each aspect of the model can be a source for establishing competitive advantage.
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1. Competitive advantage is a tool of strategic management, and is, in basic terms, what sets an organization apart from others. In other terms, its competitive edge. It comes from an organization's core competencies and capabilities, which help an organization do something other competitors cannot do. For example, Apple's competitive advantage is its brand recognition. Very few, if any, competitors can compete directly with Apple's brand, which allows it to charge premium prices for their products (Pfeffer, 1996). Competitive advantages are a 'trump card' that help organizations remain sustainable and gives them longevity. Without a competitive advantage, organizations are unable to compete and are more likely to fail.
2. Michael Poter's Five Forces Model was developed in order to conceptualize competitors and the marketplace (Roy, 2011). They are:
- Threat of new competition: This helps an organization identify who can enter the market to ...
The expert examines the account strategies surviving competitive global businesses.