The competitive advantage theory as a growth strategy
AbstractTo do well in any business you must develop a long-term strategy. Making consistent decisions in all aspects of a firm's operations is difficult without a well-defined and clearly integrated strategy. By far the most widely pursued corporate directional strategies are those designed to achieve growth in sales, assets, profits or some combination. Companies that do business in expanding industries must grow to survive. Continuing growth means increasing sales and a chance to take advantage of the experience curve to reduce the per-unit cost of products sold, thereby increasing profits. This cost reduction becomes extremely important if a corporation’s industry is growing quickly and competitors are engaging in price wars in attempts to increase their shares of the market. Firms that have not reached “critical mass” (that is, gained the necessary economy of large scale production) will face large losses unless they can find and fill a small but profitable niche where higher prices can be offset by special product or service features.
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Bibliographic InfoArticle provided by University of Craiova, Faculty of Economics and Business Administration in its journal Revista Tinerior Economisti(The Young Economists Journal).
Volume (Year): 1 (2008)
Issue (Month): 11 (November)
competitive advantage; growth strategy; growth resources; core competencies; explicit knowledge; tacit knowledge;
Find related papers by JEL classification:
- F00 - International Economics - - General - - - General
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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