What strategies should a firm use to gain a competitive advantage?

Organizations need to have unique competitive advantages to maximize profits. Organizations can deploy strategies on their hand to deal out competitive advantages. A competitive advantage is an advantage that no other competitor has, thus it is unique to the specific organization and is an extra income booster. An organization can gain competitive advantages through differentiation strategies (Porter, 1980). These differentiation strategies can be applied on prices, customer service, products/services, quality, promotion and cost reduction, etc. There are three main strategies associated with gaining competitive advantages.

1. The first strategy is called a differentiation strategy. Differentiation, as...