Importance of Competitive Advantage in the Market

Competitive Advantage

COMPETITIVE ADVANTAGE 1
Introduction
In this report, the discussion is made on the topic of competitive advantage in the market. It
contains the importance of competitive advantage in terms of cost advantage in the link of
porter’s theory. After the discussion on importance of competitive advantage, the analysis
will be done on the challenges that an enterprises might face in the global climate with the
business example.
Importance of competitive advantage
Competitive advantage is a situation or circumstances that put a company in a superior
position over its competitors. The organisation is allowed to outperform its competitors in
order to gain the benefits and the superior position in the market (Madsen, and Walker,
2015).
Creating the sustainable competitive advantage is essential for the company in the order to
enhance the efficiency and earns the high profit. As per the porter theory, the company
provides the low cost to consumers in order to attract the large consumers towards the service
(Mind Tools, 2018). Large number of consumer helps to earn the high profit and the
competitive advantage in the market. Efficiency is also enhanced by maintaining the balance
of cost of raw material, inputs and offering the selling price to consumers. The main aim of
the organisation is to earn the earn profit and grab the high market share. The objective of the
company can easily fulfil by adopting the cost leadership strategy of porters theory (Belton,
2017).