COMPETITIVE ADVANTAGE

COMPETITIVE ADVANTAGE

David Richardo’s economic theory of comparative advantage has remained valid since the 19th century until date.

Correspondingly, the same theory has provided business managers with a framework for strategic thinking.

As Porter puts it:

Competitive advantage is a function of either providing comparable buyer value more efficiently than competitors (low cost) are, or performing activities at comparable cost but in unique ways that creates more buyer value than competitors and, hence command a premium price (differentiation).

Either you win in business by being cheaper or being different, there are no other ways to it.