Competition and Strategic Rivalries

Multinational corporations have a workforce, presence, and operations in multiple countries. International expansion is one way corporations attempt to gain a competitive advantage over other companies in their industry. To learn more about how companies expand across borders, read this section.

Competition, Strategy, and Competitive Advantage

  1. What does it mean to compete with other firms in a business environment, what does it mean when a firm has a competitive advantage over its rivals, and what generic strategies can a firm implement to gain advantage over its rivals?

Now that you understand more about the environment that businesses operate in, let's take a deeper look at exactly how they operate. Businesses exist to make profits by offering goods and services in the marketplace at prices that are higher than the costs they incurred creating those goods and services. Businesses rarely exist alone in an industry; competition is usually a key part of any marketplace. This means that businesses must find ways to attract customers to their products and away from competitors' products. Strategy is the process of planning and implementing actions that will lead to success in competition.

The analytical tools we discuss here are part of the strategic planning process. Managers cannot successfully plan to compete in an industry if they don't understand its competitive landscape. It is also unlikely that a firm planning to launch a new product they are not equipped to make will be successful.



Source: OpenStax, https://opentextbc.ca/principlesofmanagementopenstax/chapter/competition-strategy-and-competitive-advantage/
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