The four building blocks of competitive advantage include efficiency, quality, innovation and customer responsiveness. Each of these concepts has very different implications for the organization as it relates to being able to successfully outperform competition. …
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Each of these concepts has very different implications for the organization as it relates to being able to successfully outperform competition. Competitive advantage is defined as the specific strategic advantages that a company maintains over rival companies in the same market or industry that serves to strengthen business position. Others consider competitive advantage to be the implementation of a unique value creation that is not currently being exploited by competition (Clulow, Gerstman & Barry, 2003). Whatever the actual definition of competitive advantage, it cannot be successfully achieved without efficiency, quality, innovation and customer responsiveness as the foundation of business. Efficiency means being able to produce more outputs than competition at a much lower price for inputs. The end result of being able to achieve this is having a cost advantage over competition. Cost advantages give the business opportunities to consider flexible pricing structures as they can now provide products at a much lower input cost. Efficiency could be achieved by setting up a lean production system that uses less physical raw resources and also reduce reliance on labor payments for manufacturing. A business might be able to find, through strategic alliances along the supply chain, opportunities for volume discounts on raw product procurement. This represents lower input costs to achieve the same or higher outputs. Quality is a very important dimension for achieving competitive advantage.
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