Sources of Competitive Advantage
Bases of Distinctive Competence

    According to this theory, there are three sources of "permanent" competitive advantage. These are summarized below with the main methods of implementation.

First-mover

Patents
Government licenses
Location lockup
Channel access limited
Supply access limited
Reputation

Economies of scale

Specialization
Spreading of fixed costs
Purchase discounts
Vertical integration

Experience benefits

Employee learning
Product redesign
Process improvement

Source:  Pitts, R. A. & Lei, D. (1996). Strategic management: Building and sustaining competitive advantage. St. Paul, MN: West Publishing.

Copyright 2000 Raymond S. Kulzick. All rights reserved. 000717.

This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance.

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Copyright 2000 Kulzick Associates, PA - Last modified: September 13, 2008