The paper "Economics of Competitive Advantage" is an outstanding example of a micro and macroeconomic assignment. For firms to build competitive advantage, they primarily require a consistent focus on identifying strategies for differential products, obtaining distinctive technologies, constructing or remodeling core competencies, as well as the accumulating intellectual property. In essence, all these elements constitute an innovation, and they can then be coupled in a bid towards making firms successful in highly competitive markets. On one side, innovation helps create and sustain a competitive advantage through value creation. In essence, through innovation, companies can achieve a rarity in their products, add to the products’ aesthetic appeal, or even allow the company to offer their products at a satisfactory and competitive price for what is on offer.
On the other hand, firms can leverage technological innovation and their human resources to establish effective and efficient processes that enable the reduction of unit costs while also enhancing productivity. Constant innovation also allows firms to construct a differential advantage that arises when a firm uses innovative strategies to produce goods or services that are different from those of the competition.
Indeed, companies can also use innovation to offer products or services that are perceivably superior to those in an offer by the competition. In this context, innovation driving differential advantage for a firm can arise from superior strategies and personnel, more advanced technology, or through the protection of innovative processes or products by the use of patents. Such dynamics help in supporting large market shares and wide margins that help sustain the competitive advantage gained by a particular firm. For instance, Apple Inc.
is well known for the production of innovative goods such as the iPhone while maintaining its market leadership by using innovative marketing campaigns that strengthen the firm’ s leading brand.
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