COMPETITVE ADVANTAGE IN A GLOBAL SETTING

According to Pitts and Snow , competitive advantage is any feature of a business firm that enables it to earn a higher return of investment despite counter pressure from competitors. They view that competitive advantage is gained at the corporate level through synergy and strategic business unit level through market share. Large firms have the following advantages :-Low cost of production and effective utilisation of resourcesAbility to diversifyPaying lower rate of interest.Ability to bargain with suppliers Providing customer services efficiently and economically.

6. Paying less taxes to government by shifting the funds from one business to another.7. Use of Portfolio planning8. Economies of scale.9. Latest Technology10. Human Resources

PORTERS NATIONAL COMPETITIVE ADVANTAGE THEORY A recent study concluded that competitive superiority is derived from the four factors such as demand factors, factor endowment, related and supporting industries and firm strategy, structure and rivalry. This concept is known as Porters diamond model. All the factors need not always be favourable for a company to get global supremacy. But the interactive affect of these four factors need to be favourable needs to be

If an industry/company in a country is to gain a global competitive advantage.

Firm Strategy, Structure and Rivalry

Factor Conditions Demand Conditions

Related and Supporting Industries 1. Factor conditions- this includes factors of production such as labor, capital and organisation.

2. Demand Conditions This is about the how to improve the existing products and develop new products to meet the increasing demands.

3. Related and Supporting Industries This condition is about the development of suppliers of raw material, market intermediaries, consulting agencies.

4. Firm strategy , structure and rivalry How the organisation improve their r&d in order to compete domestically and also invest in human resource development, technology etc.