The competitive advantage theory as a growth strategy

Ecaterina Nicoleta Ciurez
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Ecaterina Nicoleta Ciurez: University of Craiova, Faculty of Economics and Business Administration, Romania

Revista Tinerilor Economisti (The Young Economists Journal), 2008, vol. 1, issue 11, 47-52

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.

Keywords: competitive advantage; growth strategy; growth resources; core competencies; explicit knowledge; tacit knowledge (search for similar items in EconPapers)
JEL-codes: F00 F43 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:aio:rteyej:v:1:y:2008:i:11:p:47-52

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