1. Below is a list of five American companies. After choosing one of them, use the following article What Is Competitive Advantage? as a basis for examining the company's competitive advantage.
   1. McDonalds
   2. Tractor Supply Company (TSC)
   3. Dollar Tree
   4. Sherwin-Williams
   5. Beyond Meat
2. Compile a post that demonstrates how your firm of choice could use economics to either show competitive advantage in the marketplace or perhaps reinforce its already-achieved competitive advantage. Make sure you address the full range of economic issues, including scarcity, markets/competition, pricing power (price elasticity), costs, market structure, macroeconomic climate, and global market positioning. Note, not all of these companies have a global strategy in place. Should they?

9234 AM Mon Oct 3 4 "3' 55% I - thebalancemoneycom R x Q In This Article v Innovation means they meet the same needs in a new way. An excellent example of this is Apple. The iPhone was innovative because it provided a simple handheld device with the power ofa computer. Quality means that the rm provides the best product or service. Tiffany's can charge more because patrons see it as far superior to otherjewelry stores. In short, customer service means going out of the way to delight shoppers, like in the case of Nordstrom's, which was the rst to allow returns with no questions asked. FOCUS Focus means the company's leaders understand and service their target market better than anyone else. The key to a successful focus strategy is to choose a very specic target market. Often it's a tiny niche that larger companies don't serve. For example, community banks use a focus strategy to gain sustainable competitive advantage. They target local small businesses or highnet- worth individuals. Their target audience enjoys the personal touch that big banks might not be able to give, and customers are willing to pay a little more in fees for that service. National Another form of competitive advantage is used by nations, in a practice called "national competitive advantage" or "comparative advantage." For example, China uses cost leadership by exporting low-cost products at a reasonable quality level. It can do because its standard of living is lower, which means it can pay its workers less. India started as a cost leader but is movino toward differentiation. It 9234 AM Mon Oct 3 4 "3' 66% I - thebalancemoney.com E x Q In This Article v competitive advantage over other retailers whose prices are higher. The low prices can make that retailer's products more attractive than other, higherpriced options. How Competitive Advantage Works To create a competitive advantage, a business must provide a clear benet to its target market that's better than what the competition offers. Consider: What is the real benet this product or service provides? It must be something that customers need, and it must offer real value. Business owners also need to stay up to date on the new trends that affect the product, including any new technology. For example, in the early days of the internet, newspaper owners were slow to respond to the availability of free news online. They thought people would continue to pay for news delivered on paper once a day. By not staying up to date on the advance (and advantages) of the internet. they allowed their competitive advantage to slip away. A business also needs to be closely attuned to its target market to create demand, the driver of all economic growth. They need to know exactly who their customers are and how they can make their lives better. In the example above, newspapers' target market shrank to older people who weren't comfortable getting their news online. Finally, it's important to identify competitors. Competitors aren't just similar companies or products. They also include anything else your customer could do to meet the need you can fulll. Newspapers thought their competition was other newspapers until they realized it was the internet. They didn't know how to compete with a news nrnuidpr that was instant and from 9:35 AM Mon Oct 3 4 "5' 65% I - thebalancemoneycom a 5 Q In This Article v u. Ivy-u. Key Takeaways . "Competitive advantage" refers to the attributes that allow an entity to succeed over its competitors. . "Competitive advantage" is a term that is usually used in business, but it can apply to countries, organizations, and individuals, too. - Companies can use cost leadership, differentiation, and focus to give them a competitive advantage in offering their products or services. Was this page helpful? @ @ SOURCES (9 /r Related Artcles . l BUSINESS PLANS Dogging " How To Write the Company Summary in a Business Plan By Randy Duermyer 9234 AM Mon Oct 3 4 "3' 66% I - thebalancemoneycom R x Q In This Article v Cost Leadership Cost leadership means that companies provide reasonable value at a lower price. Firms do that by continuously improving operational efciency. They might pay their workers less. Some rms compensate for lower wages by offering intangible perks such as stock options, benets. or promotional opportunities. Others take advantage of unskilled labor surpluses. As these businesses grow, they can benet from economies of scale and buy in bulk. Note Walmart and Costco are two examples of cost leadership gained by sometimes paying their workers less than the cost of living. Higher minimumwage laws threaten this advantage. Differentiation Differentiation means companies deliver better benets than anyone else. A rm can achieve differentiation by providing a unique or high- quality product. Another method is to deliver it more quickly. A third is to market in a way that reaches customers better. A company with a differentiation strategy can charge a premium price, which means it usually has a higher prot margin. Note Companies typically achieve differentiation with innovation, quality, 9:34 AM Mon Oct 3 000 '1 "5'\" 66%E} thebalancemoneycom El I the balance Q In This Article v Source of Competitive Advantage Cost Differentiation Cost Leadership Differentiation Cost Focus Differentiation Focus E) the balance .1 PHOTO: THE BALANCE / MELISAA LING In 1985, Harvard Business School Professor Michael Porter wrote Competitive Advantage, the denitive business school textbook on the topic, which helps companies to create a sustainable competitive advantage. In his book, Porter explained that a company must create clear goals. strategies. and operations to build sustainable competitive advantage. The corporate culture and values of the employees must be in alignment with those goals. Porter researched hundreds of companies to identify the three primary ways that companies achieve a sustainable advantage: cost leadership, differentiation. and focus. Cost Leadership 9:33 AM Mon Oct 3 ... 4 '17-\" 66%[Er thebalancemoneycom H g the balance Q In This Article v DEFINITION: Competitive advantage refers to the factors or attributes that allow a given company to produce more affordable or higher quality services or products than its competitors. PHOTO: FIZKES / GETTY IMAGES Denition and Example of Competitive Advantage Competitive advantage is what makes an entity's goods or services superior to all of a customer's other choices. [1] While the term is commonly used for businesses. the strategies work for any organization. country. or individual in a competitive environment. For instance, a retailer that offers the lowest prices around has a 9234 AM Mon Oct 3 4 "3' 55% I - thebalancemoney.com E x Q In This Article v provides skilled, technical, English-speaking workers at a reasonable wage. Japan also changed its competitive advantage. In the 19603, it was a cost leader that excelled at cheap electronics. By the 19805, it had shifted up to differentiation in quality brands, such as Lexus. America's competitive advantage stems from its innovative practices as a nation. For example, U.S. companies are known for bringing products to the market at a more efcient pace than many other nations can. While innovation is driven by many factors, it's clear that the US. has beneted from its diverse makeup as a country. In fact, there's scientic evidence showing that diversity, and maintaining a diverse workplace, help to drive innovation and market growth forward.[2] Amar Bhid makes a good point in "The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World." Even if the United States starts to lag behind other countries in producing engineers, it's still better at bringing innovations to market. That's just one of the ways natural resources boost America's advantage. [5] Individual There can be individual competitive advantage, too. For instance, at work, you can use the theory of competitive advantage to advance your career. If you are an employee, work as if you were in business for yourself. Your target market is your employer, your benet is how you increase the company's prot, and your competitors are other employees and technology. Communicate your competitive advantage in your appearance, your resume, and your interview. Once you've got the job, continuing communicating your advantage in your work performance. You can use