Question

The primary means for gaining and sustaining competitive advantages for companies are shifting downstream. Is that also the case in a circular economy? Explain and discuss these statements.

Answer 1

Competitive advantage means a country is producing goods at comparatively lower prices than other countries which helps in increasing exports and can generate increased sales for that particular product.

he primary means for gaining and sustaining competitive advantages for most of the companies are shifting downstream. Recent researches shown that some of the upstream activities such as production, logistics are outsourced by firms. But when comes to downstream activities which is related to consumer behaviour are becoming the means for gaining and sustaining competitive advantage.So the source of competitive advantage are shifting from production (upstream activities)to customers and markets (downstream activities). Businesses are more focusing to shape customer's point of purchase behaviour.Thus activities can be done to attract the product to the customers and make them convenient to purchase the firm's products and services can lead to sustained competitive advantage. This sustained competitive advantage brings more sales to a product.

A circular economy is an economic system which aims at eliminating wastage and the continual use of resources. It works by extending product lifespan by improving it's design, servicing, and relocating waste from the end of the supply chain to the beginning in effect by using resources more efficiently by using them over and over but only once. The circular economy aims to keep products, equipments in use for longer, thereby improving the productivity of these resources. A circular economy thus can helps in reducing the pressure on environment,increases competitiveness, stimulates innovation. Hence they have have the possibility of producing products whose price is lower compared to others, which can increase the sales of a particular product.