competitive advantage

Business economy class 18

Resources
Read/review the following resources for this activity:

• Textbook: Chapter 3
• Videos: Chapter 3 (in Weekly Resources)
• Discussion
• No outside sources are required 

Introduction

In this paper, you will apply what you have learned in Chapter 3 to the firm or business you selected in order to see how the concepts can be applied to a business situation.

Keep in mind that throughout this course, papers are intended to bring real-world situations to the course material that we are covering each week. Part of your grade will depend on the connections you make between your chosen firm (which could include the economic environment of your chosen firm, the markets in which your chosen firm interacts with outside actors, the decisions your chosen firm makes, etc., depending on the particular question), the material from the chapters we covered in the week, and, when applicable, your own experience.

Activity Instructions

Be sure to address both parts of the assignment.

Part 1

For the particular firm/business you selected in Week 1, explain how the firm has a comparative advantage in the goods or services it provides (if your firm sells many different goods and/or services, you can lump related ones together and you also do not have to address every good or service that the firm provides).  How do you think they gained this comparative advantage and how does the comparative advantage help them in the markets in which they compete? You may also discuss how the employees have a comparative advantage in producing that product. Compare your firm or employees to firms or employees in a different market. That is, if your firm produces sporting equipment, don’t try to establish why your firm has a Comparative Advantage over another sports manufacturer (say Nike), but rather over a firm that isn’t in the sporting equipment market. 

Part 2

Can you think of other goods or services that the firm is not currently providing but the firm would have a comparative advantage were the firm to choose to produce the good or service?  Describe why the firm would have a comparative advantage in that new product.  If the firm decided to expand, would you suggest starting production in that good or service (for which the firm has a comparative advantage) or should it choose another good or service?  Why or why not?

Answer preview

Part 1

According to Bernard, Redding, and Schott, (2007), a comparative advantage refers to the ability of a firm to produce a given product or service at a lower opportunity cost. Various factors contribute to comparative advantage. When a firm has a comparative advantage, it enables it to produce a particular product at a lower cost potentially leading to more sales. It is advisable for a firm to determine which products it will have a comparative advantage before to goes further to design and produce them…

 

(500 words)