Competitive Advantage in Technology Intensive Industries

This chapter introduces the learner to the meaning of competitive advantage and posits that a firm’s strategy is defined as the managers’ theory about how to gain and sustain competitive advantage. The manner in which a firm creates its competitive advantage by creating more economic value than its rivals, and explains that profitability depends upon value, price, and costs is demonstrated. The relationship among these factors is explored in the context of hightechnology consumer goods-laptop computers and cars. Next, the chapter provides an explanation of a SWOT [S(trengths) W(eaknesses) O(pportunities) T(hreats)] analysis.