What is the theory of a competitive advantage?

The theory of a competitive advantage is access to the process of sales and marketing, which should be placed on the production of high quality goods and services that can be sold at the best possible prices. This is contrary to the theory of comparative advantages that tends to focus more on the production of goods and services based on the availability of natural resources and the potential to produce goods that can be exported. There is a discussion on the basics of the theory of a competitive advantage and how well this theory fits into the current worldview.

With the theory of a competitive advantage, several assumptions are commonly linked. One is related to the understanding that it is not necessary to have natural resources to produce goods and services. The import of what is needed for production is easy to manage, allowing any good or service to be produced anywhere in the world. This is in contrast to the idea of ​​using local resources as a means to maintain low costs. According to supporters a competitive advantage means being an open import of essentials that nEhi -danger that the economy would be locked in the production of goods that depend on natural sources, which can eventually be exhausted, limiting the extent of production within the geographical location.

With the focus of the theory, a competitive advantage for quality production is to understand that the work used to produce the goods in question will be somewhat cheap compared to generated revenues. This does not mean that the work will be necessarily cheap, but it will be in proportion to profits generated from the sale of high quality goods at higher prices. Higher profits mean the ability to maintain production, satisfy demand and maintain employees at work, which will feed the local economy and help increase the standard of living.

This emphasis on quality is understood to provide a clear advantage over competitors who work from a different approach. With the theory of competitive advantages, quality overcomes other options that have lower quality,Although this inferior goods are available at much lower prices. Since consumers are more aware that they spend more money on buying other goods that do not provide the same level of satisfaction, they migrate on products that can initially cost a little more, but eventually provide greater usefulness in the long run.