Question

1. How do you think firms’ can survive or even further develop through obtaining more competitive advantage during the COVID-19 pandemic? In other words, do you think firms’ competitive advantage is very important for them to survive and further develop?

Answer 1

Competitive advantage of firms is an aspect which ensures that the company will survive successfully among its competitors, create a value of its own and increase its value among the shareholders. The aspect of competitiveness should be unique and only then it will have its own potential strength.

Some of the competitve advantages firms can recognise are

1. Geographic locations that are advantageous for their products.

2. Resources that are not easily available for their competitors.

3. Skilled labours and employees who are excellent in that particular field.

4. Invention or use of modern technology that will enhance their production.

5. Cost efficient production.

The following are some of the strategies that should be adopted by firms to eatablish competitive advantage.

1. Cost leadership -

Companies should be able to produce products at a lower cost. This is possible in mass production and a nominal selling price can be fixed when compared to their competitors. It will prove profitable towards the end.

2. Differentiation - a company should be able to give high quality products and excellent customer service at affordable costs. It will be differentiated from their competitors.

3. Focus of the organization should be towards their narrowed customers who prefer the company's products regularly. The firm should be able to cater to the needs of the customers.