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Essay / Research Paper Abstract
This 9 page paper is written in two parts. The first part explains the concept of competitive advantage and looks at how a firm may decide what form of advantage to pursue. The second part of the paper discusses advantages and challenges and strategies that may be found in international business. The bibliography cites 8 sources.
Page Count:
9 pages (~225 words per page)
File: TS14_TECAInter.rtf
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Unformatted sample text from the term paper:
features, a better appearance, a strong brand reputation, or a better operating profit to allow for increased expenditure on areas such as research and development, or sales and marketing support.
This approach to success in business is summarised by the concept of competitive advantage as defined by Michael Porter. Porter (1985) defined two potential sources of competitive advantage;
cost advantage and differentiation, he argued that firms would require one of these to be successful in the long term; interestingly he argued that a firm could not have both,
that they were incompatible, however, despite the agreement that exists regarding the benefit and sources of competitive advantages, there are a number of commentator, such as Asker, who believe that
both can be combined in certain circumstances (Thompson, 2007). To consider the way that a firm may be able to develop a competitive advantage each type can be considered.
In trying to undertake a cost advantage the company may seek to be the cost leader in either the industry, or just the relevant segment of the industry. In each
industry or segment only one company may occupy the cost leadership position. This means a company will "find and exploit all sources of cost advantage... [and] ... sell a standards
no frills product" (Porter, 1985; 13). This means that the cost to the firm of producing the good is lower than to its competitors. This may be due to economies
of scale as well as the way in which costs can be reduced, such as leveraging the power held over suppliers and contracting out labour. To summarise the cost
advantage this is seen as a strategy that bring goods of an acceptable quality to market, but has lower production costs than its competitors, is able to maintain that
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