Competitive Advantage

TL;DR: To achieve competitive advantage, a company must provide a better solution to a specific problem than its competitors or offer a similar solution for a lower price.

Abstract: To achieve a competitive advantage is the goal of all business strategy. It means that a company either provides a better solution to a specific problem than its competitors or offers a similar kind of solution for a lower price and is a marketing concept. A business unit is said to have achieved competitive advantage when it “sustains profits that exceed the average for its industry” (http://quickmba.com/strategy/competitive-advantage). Michael E. Porter who formed the term ‘competitive advantage’ with his book Competitive Advantage: Creating and Sustaining Superior Performance in 1985, differentiated two basic types of competitive advantage: cost strategy and differentiation strategy.