1.1.

Competitive Advantage
Competitive advantage has two main dimensions on basis of the theory of competitive
advantage; low-cost advantage and differentiation advantage (Porter, 1980). It requires
marketing capabilities to gain the differentiation advantage so that products of a firm are better
known to customers as compared to competitor’s products (Tan & Sousa, 2015). If a company
have competitive advantage over competitors then their chances of survival and sustainability
increases. Firms can easily expand profits and business performance (Nuryakin, Aryanto &
Setiawan, 2018). If a company wants to determine the perceptions of the market to achieve the
success, it must manufacture products/services that have superior value. Superior value is the
subjective concept and it is in the minds of customers (Wulandari, Djastuti & Nuryakin, 2017).
Companies can also achieve competitive advantage through innovations (Darroch &
McNaughton, 2002).

Today’s highly competitive environment in which the manufacturing firms operations is

characterized by growing world competition and increasingly demanding customers (Rich,
1997). Sparks and Fernie (1998) and Jones (2002) stated that these dynamics are especially
observed in the fashion and clothing retail industry. Furthermore, as the new competitive
environment changes to more global, technologically oriented and customer driven, as product
life cycles shrink and new products get introduced rapidly, as customers continually demand
higher quality, faster response, and greater reliability of products and services, the new world
market demands a more customer responsive behavior by companies. Womack and Jones (1996)
argued that these pressures have fueled a continuous change process within organizations,
impacting all the areas of a business, from rapid technological changes, to a much shortened
product life cycle. They further state that since the late 1990s change and uncertainty
surrounding manufacturing organizations and their supply chains grew. Firms have responded
with innovative products and improved manufacturing processes to manufacture products.
Sabath (1998) illustrated that supply chains need to be managed in a way that enables quick
response, so as to cope with volatile demand. The underlying factor is required to focus on time,
flexibility, and speed of response of supply chain to succeed in this increasingly global
marketplace thereby creating competitive advantage for a company.