Building Competitive Advantage

The profits of the firms (and by extension, the return on investment to the shareholders of a company) depend on the extent to which a firm deploys its resources and capabilities to gain an advantage over its competitors.

Firms elect to gain competitive advantage by competing on:

1. Cost. The firm is able to provide a product at the lowest cost or more frequently by providing a higher value proposition at a lower price point.
2. Differentiation. The firm is able to provide a product or service that is different or of higher quality that customers are prepared to pay for;
3. Niche. The firm is able to serve a niche that is not easily services by the larger players.

Competitive advantage provides significant benefits provided that the advantage is profitable  and sustainable for a reasonable period of time.

The Business Farm provides a range of analytical and management services in this area.