01 Review 2 – ARG Rivera,Marianel A

BSBA601A

Instructions
Answer the question in no more than 10 sentences.
1. Explain the concept of competitive advantage.

Competitive advantage is defined as outperforming competitors in the same industry or

outperforming the industry average. It may also be defined as the factor that makes a business's goods
or services superior to the options available in the marketplace. Five factors influence competitive
advantage first is Benefit. It is concerned with the market value of a product or service. Companies must
identify the unspoken benefits of their product or service in addition to the product features.

Next is the Target market which refers to a specific group of customers within a company's
available market to whom the company directs its marketing efforts and resources. Companies must
understand their target market to innovate products and services that meet the specific needs of their
customers. Competition is about competition among firms selling similar goods and services. Aside from
companies that sell similar products, a company must also identify its market's indirect competitors. The
cost advantage refers to an enterprise's strategy of producing a product or providing a service at a lower
cost than its competitors.

And the Differentiation Strategy refers to a company's strategy of marketing the characteristics
of a product that distinguishes it from other similar products and using that distinction to drive
consumer choice.