Theories of Competitive Advantage

Theories of Competitive Advantage explain how companies achieve greater success than their rivals. Essentially, a company can stand out by offering unique products, employing efficient processes, or leveraging valuable resources. Michael Porter identified two main types: cost leadership, where a company provides goods at lower prices, and differentiation, where it offers unique features that justify higher prices. Additionally, firms can achieve competitive advantage through innovation, superior customer service, or strong branding. By effectively harnessing their strengths, companies can attract and retain customers, thus ensuring long-term profitability and success in the market.