Bìznes Inform (Feb 2023)
Formation of Competitive Advantages as the Foundation of Strong Competitiveness of Enterprises
Abstract
The purpose of the article is to provide a definition for the «sustainable competitive advantage», outline the different types of advantages and highlight the factors that should be considered when forming such a definition. It is identified that a sustainable competitive advantage is something that a company does better than its competitors for a long period. An advantage can be a company asset, a value, quality, or a characteristic that others find difficult to reproduce. As a result, the advantage factor allows the company to stand out in the market and rise above competitors. Presence of this competition factor helps the company increase sales, increase brand awareness, or make a bigger profit compared to other similar businesses. Several factors affecting an organization’s sustained advantage are allocated, including resource factor, variable cost structure, distribution network, customer service, and intellectual property. The formation of competitive advantages in building a market strategy for the development of a company consists in understanding and successful manipulation with external and internal factors of influence, subject to limited resources and unlimited opportunities. Resources can be combined and developed into abilities, which in turn creates key competencies. Opportunities is a firm’s ability to turn resources into competitive products and processes. They are difficult to document as procedures, and therefore difficult to copy. Intangible resources, as a rule, are the main source of unique strategic opportunities. In turn, capabilities are a more likely source of unique core competencies that create sustainable competitive advantages. The essence of the strategy is to choose actions that differ from competitors – a company can outperform competitors only if it can establish a difference that it will be able to maintain.
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