The sources of international competitive advantage

Overview[ edit ] Competitive advantage is the leverage that a business has over its competitors.

The sources of international competitive advantage

The group markets low- consumption small cars, luxury cars, trucks, buses and motorcycles under its 12 brands: An international competitive advantage can either be derived from the external environment a company resides in, or through its internal strategic and structural orientation Sitkin and Bowen, According to traditional trade theories unlimited access to these basic factors marks a substantial advantage for industries Porter, Germany offers two factors that are particularly appealing to the automotive industry: Scientists and engineers constitute around 6.

Germany also offers an internationally unique dual education system, which combines on-the-job and vocational school training, thus guaranteeing industry relevant and specific training GTAI, b. Volkswagen has also benefited from stable labour costs and gradually falling unit labour cost of roughly 0.

This trend has led to a considerable competitive cost advantage for all German manufacturers GTAI, a. This state of the art infrastructure allows Volkswagen to quickly and reliably move its in- and outputs. Highly informed and demanding customers will exercise significant pressure on companies to continuously innovate and upgrade their products and services Porter, Furthermore, a competitive advantage can arise from a customer base that is indicative of global demand trends, or better, shapes customer needs and wants elsewhere.

If these conditions are given a company will be pushed to generate the most advanced products or services prior to demand spreading elsewhere in the world Porter, The German consumer is probably the most demanding and sophisticated automobile consumer in the world.

The sources of international competitive advantage

German consumers have traditionally set high standards in terms of engineering, design and safety, but due to rising fuel prices and environmental concerns in Germany, the spectrum of demands has grown even wider The Economist, These high standards have enticed innovations in the past resulting in developments such as the four-wheel-drive system and continue to push VW ahead of its international competitors Taylor, In an effort to tackle environmental concerns the VW Group recently committed to reducing the average emissions of its Volkswagen fleet to just 95 grams of carbon dioxide per kilometre by Volkswagen Group, More importantly, companies benefit from a rapid and constant exchange of information over new innovations, technology, and industry and consumer trends.

A total of five distinct automotive clusters exist in Germany Autoanalysis, It is an international technological leader in crucial supporting industries to the automotive industry including machine building and electronics GTAI, b.

The automotive and electronics sector are also two of the biggest customers of the machine and equipment sector, demonstrating the strong cohesion of the German industrial sector GTAI, d.

Volkswagen also derives great benefit from the existence of cutting-edge logistic firms in Germany, which spur the rapid and efficient transport of in-and outputs GTAI, e. Different cultural backgrounds favour varied managerial approaches and firm structures, which may be suited better to one industry rather than another.

Fierce rivalry forces companies to continuously innovate and upgrade to remain in a competitive position nationally.Corporate, government or personal Open Source Intelligence Training (OSINT).

Gain a competitive advantage and make better-informed decisions. Now beyond its eleventh printing and translated into twelve languages, Michael Porter’s The Competitive Advantage of Nations has changed completely our conception of how prosperity is created and sustained in the modern global economy.

Porter’s groundbreaking study of international competitiveness has shaped national policy in . This essay, labelled 'Cultural diversity is a source of international competitive advantage. Critically evaluate', shall point out the complexity of this topic. 'What business strategy is all about; what distinguishes it from all other kinds of business planning - is, in a word, competitive advantage.

Comparative Advantage Versus Competitive Advantage Competitive advantage is what a country, business, or individual does that provide a better value to consumers than its competitors. There are three strategies companies use to gain a competitive advantage.

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Jun 14,  · 1. Meaning and concept of International competitive advantage IN HINDI: Competitive advantage are capabilities that are difficult to replicate or imitate and are non trad-able.

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