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The competitive advantage theory as a growth strategy

Author

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  • Ecaterina Nicoleta Ciurez

    (University of Craiova, Faculty of Economics and Business Administration, Romania)

Abstract

To 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.

Suggested Citation

  • Ecaterina Nicoleta Ciurez, 2008. "The competitive advantage theory as a growth strategy," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(11), pages 47-52, November.
  • Handle: RePEc:aio:rteyej:v:1:y:2008:i:11:p:47-52
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    File URL: http://feaa.ucv.ro/RTE/011-06.pdf
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    More about this item

    Keywords

    competitive advantage; growth strategy; growth resources; core competencies; explicit knowledge; tacit knowledge;

    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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