Page 6 - Economy_Efficiency and Competitiveness2

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Two main types of competitive advantage:

• Comparative Advantage - the advantage obtained by being able to produce the product at a lower cost
than a competitor can do. The same applies to the global economy.

• Differential Advantage – our product must be differentiated from other products on the market, both in
terms of quality and uniqueness.

1.3 How to improve business competitiveness?

For your company to survive in the market, it must be competitive. Factors that affect the level of
competitiveness of an organisation:

• Internal and external analysis - For a company to be competitive, it must be aware of its strengths and
weaknesses and it must have the necessary knowledge of the organisation and the environment. This will
help in better decision-making and effective strategic planning.

• Pricing - The company should present in detail the value that the customer will gain by purchasing a given
product

• Customer loyalty - Customers pay more and more attention to the beliefs and values that the company
represents. It often happens that the customer looks at how the company looks at social and
environmental issues.

• Innovation in product development - The search for innovation and new ways of doing things are factors
that affect a company’s competitiveness