Competitive advantage
What Competitive advantage means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Competitive advantage
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Reference: Pearson Edexcel
A sustainable edge that small firms achieve by cultivating close, mutually beneficial relationships with key stakeholders, including local suppliers, employees and loyal customers.
An edge over rivals that can be cost-based, through lower prices, or based on differentiation, through improved quality and responsiveness to customer needs.
An advantage held by incumbent firms through continuous R&D and technological change that is hard for new entrants to match.
A unique feature or benefit that makes a product or service more desirable than competitors' offerings.
A benefit that adopting environmentally friendly practices can provide to a business.
A condition that allows a firm to generate more sales or margins than its rivals.
Topics that use Competitive advantage
- Barriers to entry (Pearson Edexcel A-Level)
- Efficiency and competitiveness using lean production (Pearson Edexcel A-Level)
- Ethical issues (Pearson Edexcel A-Level)
- How small firms compete (Pearson Edexcel A-Level)
- Research and development (R&D) and innovation (Pearson Edexcel A-Level)
- The competition (Pearson Edexcel A-Level)
Related terms
- Market structure
- Profit maximisation
- Advertising Standards Authority (ASA)
- Barriers to entry
- Branding
- Buffer stock
- Dynamic market
- Economies of scale
Using Competitive advantage in the exam
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