Apple Competitive Advantage

Introduce a brief background of the business and its history. Use the ‘Brand Royalty' article to help you on this.

Competitive advantage is when a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. The goal of much of business strategy is to achieve a sustainable competitive advantage.

There are two main types of competitive advantage. Cost advantage and differentiation advantage. A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost(cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Therefor a competitive advantage enables the firm to create superior value for its customers and superior profits for its self.

Cost and differentiation advantages are known as positional advantages since they describe the firm position in the industry as a leader in either cost or differentiation.

A resource-based view emphasises that a firm utilises its resources and capabilities to create a competitive advantage that ultimately results in superior value creation.

The following diagram combines the resource based and positioning views to illustrate the concept of competitive advantage.

Resources and capabilities
According to the resource-based view in order to develop a competitive advantage the firm must have resources and capabilities that are superior to those of its competitors. Without this superiority, the competitors simply could replicate what the firm was doing and any advantage quickly would disappear.

Resources are the firm specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. The following are some examples of such resources.

 Patents and trademarks
There are a high number of apples own private patents and innovative designs that licences out to obtain extra profit/
 Installed