The concept of competitive advantage is as important for non-profit organizations as it is for profit organiza

Question

The concept of competitive advantage is as important for non-profit organizations as it is for

profit organizations”. Do you agree with this statement or not? Explain with examples to justify

your answer.

Answer 1

One has to agree, by the very definition of Competitive Advantage. When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. A CA exists when the firm is able to deliver the same benefits as its competitors at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus a CA enables the firm to create superior value for its customers and superior profits for itself. This is obviously desirable, whether you're running a retail business like Starbucks or running an orphanage.