Competitive Advantage: Attributes for Higher Market Position

Running head: COMPETITIVE ADVANTAGE
Competitive Advantage
Name of the Student:
Name of the University:
Author Note:

COMPETITIVE ADVANTAGE
1
Competitive advantage:
Competitive advantage refers to the attributes of companies which allows them to
compete with their competitors and gain higher market position compared to them. Noe et al.
(2017) define competitive advantage as the attributes which business organisations earn largely
due to the skills and talents of their human resources. They point out that human resources or
employees are responsible for both making and executing decisions using their intellectual
capital. Bernal‐Conesa, de Nieves Nieto and Briones‐Peñalver (2017) opines that technological
advantages like access to modern technology can also attribute companies with advantages of
manufacturing goods at lower costs compared to their competitors which again would attribute
them with technological advantages. Ivanov and Mayorova (2015) point out that top brands of
goods which business organisations manufacture are also capable attributing the firms owning
them higher profits compared to their competitors. Beckers et al. (2017) strengthen the argument
by pointing out that the factors like huge customer bases and shareholders bases attribute the
firm which revenue and capital generation respectively. These attributes like high revenue and
capital generation enable the companies acquire assets like smaller firms either within the same
industry or from a different industry(s). Thus, it finally that the term competitive advantage can
be defined from different perspectives. Finally, it can be pointed out that competitive advantage
refers to attributes like intellectual capital, financial capital, technological capital and customer
bases, any or all of which allow firms possessing these earn higher profits and attain higher
market positions compared to their competitors.
Distinctive capability:
Distinctive capability refers to those special capabilities which attributes firms with
special advantages which its competitors find challenging to achieve. Lévesque et al.(2015)

COMPETITIVE ADVANTAGE
2
define distinctive capabilities as those attributes which companies earn by virtue of their special
position. For example, banks have the distinctive capability of maintaining their own current
accounts. Similarly, companies like Google can use their own cloud in their own businesses. The
other companies are customers to the banking and the IT companies because they cannot
manufacture financial products and cloud respective. They are dependent on banks and IT
companies for these two products. Thus, for a banking company, its distractive capability lies in
its advantage of using its own products to support its services. Similarly, for Google, the
distinctive advantage lies in the fact that the company can use its own cloud products to share
business information.
Core competence:
Core competence refers to combination of attributes that makes a firm more distinct from
its competitors, thus enabling it to generate higher profits compared to the latter. Espinoza and
Ukleja (2016) mention that business organisations have to develop and increase their respective
core competencies to retain their competitive position in the market. For example, the core
competencies of multinational ICT companies like Apple Inc lies in their capability of
manufacturing high-end products like smart phones which dominate the smart phone market
globally. Similarly, the core competencies of multinational consumer goods companies lies in
their power to market products at low costs, yet retain the high quality which smaller companies
cannot ensure. Thus, in short core competencies are the attributes related to the core business
areas of companies which differentiates them from their competitors, thus attributing higher
profits.