Competitive Advantage

Competitive Advantage

 Competitive Advantage

Competitive advantage is dominance acquired by a business when it can offer the identical value as its opponents, but at a lesser price, or can raise the prices by providing better value through disparity. Competitive advantage results from matching main competencies to the opportunities (Keller & Price, 2011).

The firm does not have a competitive advantage yet, but it is established in the following ways: coming up with a brand of loyalty by giving the best service to customers. The coffee be served in appealing cups, have days where there are special offers, like giving free accompaniments with the coffee and get workers who have etiquette.

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Use business information resources. Take advantage of the information revolution. It forms a competitive advantage by suggesting to companies new ways to outdo their competitors. However, be careful to get reliable information, as not everyone is out there to provide genuine help.

Economic value added is the incremental variance for return over a business’s cost of capital.  The coffee shops EVA is determined by (investment capital) x (Actual profit on investment – Percentage price of capital) (McGrath, 2013).

Grant, R. M. (1991). The resource-based theory of competitive advantage: implications for strategy formulation. Knowledge and Strategy.(Ed. M. Zack) pp, 3-23.

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