Comparative Advantage Theory Of Competition

Comparative Advantage Theory Of Competition - Comparative...

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Comparative Advantage Theory Of Competition Comparative advantage leads to competitive advantage. A firm should ideally have many comparative advantages and this would in turn lead into a competitive advantage. For example the comparative advantages of a firm may be its patents, capital, knowledge, labor, suppliers, natural resources, business process, trade secrets etc. The manipulation of these will bring out the competitive advantage of the company. Once you have a competitive advantage then you will have an edge over your competition. The problem is that most companies do not realize how the two advantages work and thus end up not exploiting the limitless opportunities and benefits that comes out of it. The neoclassical theory deals with perfect competition in markets. If this were the case then there would be no need for a company to have a competitive advantage over another. This is the basic difference between the theories. Here are a few more differences between the two theories:
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Comparative Advantage Theory Of Competition - Comparative...

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