Understanding Competitive Advantage

The video introduces the concept of competitive advantage, explaining its importance in business. It uses examples like Amazon, IKEA, Nike, and Google to illustrate how companies achieve and maintain competitive advantage. The video defines competitive advantage as a sustainable edge over competitors, achieved through cost or differentiation advantages. It also links these concepts to Porter's generic strategies, emphasizing their role in long-term business success.

Which company is known for dominating the e-commerce market globally?

• Walmart

• Amazon

• eBay

• Alibaba

What percentage of online web searches in the UK use Google?

• 70%

• 90%

• 100%

• 50%

What is a key characteristic of a sustainable competitive advantage?

• Long-lasting edge

• Short-term success

• Easily replicable

• High initial cost

What is one way a business can achieve a cost advantage?

• Limited distribution

• Premium pricing

• Economies of scale

• High advertising costs

Which of the following is NOT a factor in achieving a cost advantage?

• Large scale operations

• Economies of scope

• Operational efficiency

• High production costs

What does a differentiation advantage focus on?

• Reducing staff

• Lowering costs

• Increasing production

• Unique value

Which aspect is NOT typically associated with differentiation advantage?

• Style

• Customer service

• Low price

• Quality

What is the relationship between competitive advantage and Porter's generic strategies?

• They are complementary

• They are identical

• They are unrelated

• They are opposing concepts

Which of the following is a generic strategy proposed by Porter?

• Product diversification

• Brand loyalty

• Market saturation

• Cost leadership

What is the main benefit of having a competitive advantage?

• Increased competition

• Higher market share

• Lower profits

• Reduced market presence