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1. Strong research and development capabilities
A business can gain a strong competitive advantage in its industry if it has strong research and development capabilities. Strong research and development reflects in the company’s product development processes. Companies with strong research capabilities often lead the market with innovation.
2. Access to intellectual properties
The next source of sustainable competitive advantage a business can exploit is the holding of an intellectual right; which can exist in the form of trademarks, trade names, copyrights and patents.
3. Exclusive re-selling or distribution rights
Holding exclusive distribution right is another source of sustainable competitive advantage. When a company holds exclusive rights to a product within a given territory; that product can only be sourced from the distributor or holder of such rights.
4. Ownership of capital equipment
This source of competitive advantage is mainly exploited by companies operating in industries where heavy machinery is needed. Example of such industries where ownership of capital equipment is a competitive advantage includes publishing, manufacturing, oil exploration, construction and mining.
5. Superior product or customer support
Any company that has the capacity to quickly respond to customers need and provide subsequent support will have a competitive advantage over competitors.
6. Low cost or high volume production
If your business has the capacity to produce in high volume; then it can gain a sustainable competitive advantage by reducing its profit margin and recoup it through high volume sales and turnover.
7. Economic factors
The seventh source of sustainable competitive advantage is the economic factor of a region within a speculated time frame. A manufacturing company operating from China or India will have competitive advantage over a company manufacturing in the United States because the economic system in China is more favorable with respect to start up overhead and labor cost.
8. Superior database management and data processing capabilities
This source of competitive advantage is quite clear and understandable. A company that demonstrates the capacity to process data speedily will have a competitive advantage over other firms with lower processing capacity. This source of competitive advantage usually plays itself out in the banking industry, telecommunication industry and the service industry in general.
9. Strong marketing strategy
In the market place, the company with the best marketing strategy wins. No doubts about it. The competition to gain a stronger competitive advantage in the marketplace is the reason why giant corporations spend millions of dollars on marketing research and advertising annually.
10. Access to working capital
Access to working capital is one of the strongest sustainable competitive advantages a business can have over its competitors. Access to working capital is the difference between a billion dollar company and a million dollar company or a small business and a big business.
11. Excellent management team and operations
Show me a business that is a market leader in its industry and I will show you a business backed by a strong management team. Exploiting other sources of competitive advantage without a strong business team on ground will only be a futile attempt. A business management team is essential to harnessing opportunities that create the needed competitive advantage.
12. Barriers to entry or monopoly
Some businesses have gained competitive advantage because the entry in their industry has been limited by surrounding circumstances. A good example of industry where barriers to entry creates competitive advantage is the oil exploration and mining sector (industries where licenses are needed to gain entry because there is government restriction on entry). Monopoly is also a sustainable competitive advantage and can be gained by having strong ties with the government.
As a final note, these are the12 sources of sustainable competitive advantage a business can exploit. Remember that a company without a competitive advantage cannot compete and when you can’t compete; you are as good as dead.
First Of All We Have To Know What Is Ment By Competitive Advantage:
When A Firm Sustains Profits That Exceed The Avg. Of It's Industry; The Firm Is Said To Possess a Competitive Advantage Overs its rivals.
We Also Can Say That A C.A. Exists When The Firm Is Able To Deliver The Same Benifits As Competitors But At Lower Cost ( i.e. Cost Advantage ), Or It Can Deliver More Benifits That Exceed Those Of Competing Products ( This Is Called Differentiation Adv. ).
The Summary Of The Main Sources Of C.A. Can Be Foe Example:
The Leadership
Human Resources
Technology Development
Logistics and Operations
Government Programs
And Much More According To The Nature Of Each Country And The Nature Of The Market
Thank You
The major sources of competitive advantages are
1) Cost reduction in the market by pretending the same quality to customer.
2) Good customer relationship by giving him after sale services.
Competitive advantages vary from one company to another and vary from
Site
Technology
Environment
Employment
Can distinguish between the three sources of competitive advantage:
1. Strategic Thinking
2. National Framework
3. Entrance resources.
agree with all answer
First of all we have to understand what is a competitive advantage? And this concept refers to "a set of factors or capabilities that allows firms to consistently outperform their rivals"
Now that we know what a competitive advantage is the next question is how can we produce a competitive advantage?, Chandler & Hank suggest us we use capabilities based on the resources, in order to gain and keep competitive advantages. Now, the sort of resources referred here are the equipment, the skills of the managerial and worker force, the brand names and the reputation.
1. Strategic Thinking :
thinking must change due to technology change can create new possibilities for the design of a product, the way of commercialization, produce it or deliver it and the subsequent auxiliary provided services. New sectors are born when this technological change makes a new product feasible
2. National Framework
Change in the governmental dispositions: The adjustments in the nature of the governmental dispositions in aspects concerning to issues like product norms, environmental controls, entrance restrictions and commercial barriers, are other habitual stimulants for innovations that turn into competitive advantages.
3. Entrance resources.
Change in the costs or the disposability of inputs: This is a reflex of new conditions in the provider sectors or because of the possibility of utilize a different sort of input
Finally keeping the advantage require that the sources are broaden and their sources enhanced, lifting them in the hierarchical scale to more sustainable types. Also it requires changes, it requires that the company exploits the tendencies of the sector instead of ignoring them; it requires that the company invest in order to block the routes which represent a path for attack. The company might have top destroy old advantages in order to create new ones of high order level.
Leadership
