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’.a

Answer 1

Obviously, Successful businesses outperform their competitors if they have any advantage or superiority which makes their businesses perform well compared to their competitors.Their business becomes more performing and revenue generating than their competitors because of core competence as well.Let us discuss the terms competitive advantage and core competence in detail :

(1) Competitive Advantage :

Competitive advantage means the advantage that a firm or a business gets over its competitors due to its high quality and low cost products or services.

• In other words we can say that it is basically an advantage to a company since it can produce either the same quality product or services in low cost or it can produce the high quality product or services in the same budget.

• Hence this advantage leads to more and more sales of their product or services.Competitive advantage not only leads to increase in brand value of the product or company but also enhances the trust level of the customers and hence encourages the customers to come and invest more and more in the product or service of the company.

• Competitive advantage also enhances the market quality since all the competitors will try to overcome each other over the quality or the cost which will ultimately benefit the customers.

Examples of competitive advantage can be Low cost/budget,High quality,convenient service etc.

(2) Core Competence :

Core Competence means the company or firms have a particular advanced proficiency in some skill through which they can overcome the market hold of their customers can create a proper marketplace for their own and hence can increase their sales.

• Core competence can be in many forms i.e. the companies's own skill or proficiency in producing the product or it can in the form of the support from external sources too such as government or other service providing firms or companies.

• Core competence can create the competitive advantage for a company over their competitors and hence can lead to increase in the quality or efficiency of the product.

• It eventually leads to the more and more convenience to the customers of the company and hence builds a bigger trust value and brand name for the company.

Examples of the core competence can be better customer service,better raw material, bigger marketing network,collaboration with higher authorities of the government or other agencies etc.