6&7. Competitive Advantage

Question 1

Competitive advantage

Answer 1

A favourable situation that a business has over its rivals

Question 2

Cost advantage

Answer 2

Lower cost than its competitors without reducing quality eg Lidl

Factors reducing costs:
Technology
Economies of scale (as a business grows unit costs decrease)
Social media methods eg tiktok

Question 3

Differentiation advantage

Answer 3

Creates a perception that its products/services are better than their rivals.

2 common ways:
Unique Selling Point (USP)
Branding eg Apple