Definition of Competitive Advantage

Definition of Competitive Advantage

By Agung Hari Sasongko – D4572

Competitive advantage is based upon distinctive competencies. Distinctive competencies        are a firm-specific strength that allows a company to differentiate its product from those offered by rivals, and achieve substantially lower costs that it rivals (Hill and Jones, 2012:83). In reviewing the concept of competitiveness is inseparable with the concept of strategy, because it implies a strategy to increase competitiveness carried out by positioning analysis by looking at where the company’s business will be run, in which areas of competition, and perform resource base-analysis is how so companies will compete. The high business competition requires every company to another create a variety of products and services that have high competitiveness. According Rothaermel (2015:130), gaining and sustaining competitive advantage is the defining goal of strategic management and competitive advantage leads to superior firm performance.

Competitive advantage is an important component in seeing the continuity of a company. Each company tried to create their competitive advantage in the eyes of their customers. Innovation is an important step to creating a competitive advantage of a company. Companies that continue to innovate will be able to always develop and create new products that can satisfy consumers.