explain why the concept of competitive advantage is central to the study of strategic management

Expert Solution

The concept of competitive advantage is central to strategic management study. Here's why:

1. Market leadership: Through competitive advantage, a firm can be able to lead the market by staying ahead of the curve and the competitors. This helps the firm to be seen as a market leader and a significant player in the market.

2. Market share: By leveraging the competitive advantage like better customer service quality, the firm can gain more customers to cater to and hence increase its market share. This helps the firm to achieve its long term strategy.

3. Profitability: By leveraging the competitive advantage like cost efficiency, the firm is able to sure to run the operations in the minimum possible cost and hence increase its EBITDA. This helps the firm to achieve its long term profitability strategy.

4. Sustainability: By leveraging the competitive advantage, the firm is able to become a long-run sustainable firm with improved efficiency and effectiveness. It can take part in CSR and also provide high-quality service to its customers. This helps the firm to achieve its long term strategic objectives.

keosha answered 4 months ago

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