Question

Successful businesses outperform their competitors due to some advantages that make them successful. Businesses also remain profitable due to their core competence. Discuss the concepts ‘competitive advantage’ and ‘core competence’.

Answer 1

Successful businesses outperform their competitors due to some advantages that make them successful. This is competitive advantage. In other words what makes your firm better than your rivals or competitors.

It can be achieved through producing high quality products, branding, achieving cost effectiveness, and attaining customer satisfaction. Three strategies to achieve competitive advantage are cost effectiveness, product differentiation and focusing.

Core competence on the other hand may be defined as the basic strength and capacity of a firm with regard to various resources, knowledge skills and potentials to make differences in the market.

It is the core competence that helps a firm to achieve major market share, product differentiation and customer satisfaction.

So competitive advantage and core  competence are equally required to have success and to make profit in business as both are hardware and software of the firm

Competitive advantage helps the firm to overtake its rivals in the market by giving short run superiority over the other firm. It helps to function well by achieving strength.

Core competence is part of the structure of the firm which helps to ensure success in the long run. It is the endurance of the firm which helps in achieving product differentiation cost efficiency and customer satisfaction in the long run, so competitive advantage make the firm successful and core competence make the firm profitable in the long run.