Csr and competitive advantage

March 24, Over the past two decades, sustainability has become more than a fad or just a buzz word. Research shows that sustainability has real business benefits when conscientiously integrated into business operations. Six major advantages for practicing sustainability are:

Csr and competitive advantage

CSR and Competitive Advantage

The key component for business success. Definition Competitive advantage means superior performance relative to other competitors in the same industry or superior performance relative to the industry average.

There is no one answer about what is competitive advantage or one way to measure it, and for the right reason. Nearly everything can be considered as competitive edge, e.

Every company must have at least one advantage to successfully compete in the market. There are many ways to achieve the advantage but only two basic types of it: A company that is able to achieve superiority in cost or differentiation is able to offer consumers the products at lower costs or with higher degree of differentiation and most importantly, is able to compete with its rivals.

An organization that is capable of outperforming its competitors over a long period of time has sustainable competitive advantage. The following diagram illustrates the basic competitive advantage model, which is explained below in the article: How a company can achieve it?

An organization can achieve an edge over its competitors in the following two ways: When PEST factors change, many opportunities can appear that, if seized upon, could provide many benefits for an organization. A company can also gain an upper hand over its competitors when its capable to respond to external changes faster than other organizations.

By developing them inside the company.

Csr and competitive advantage

A firm can achieve cost or differentiation advantage when it develops VRIO resources, unique competences or through innovative processes and products. When these factors change many opportunities arise that can be exploited by an organization to achieve superiority over its rivals.

For example, new superior machinery, which is manufactured and sold only in South Korea, would result in lower production costs for Korean companies and they would gain cost advantage against competitors in a global environment. For example, Subway and KFC. If opportunities appear due to changes in external environment why not all companies are able to profit from that?

The advantage can also be gained when a company is the first one to exploit the external change.

Csr and competitive advantage

Otherwise, if a company is slow to respond to changes it may never benefit from the arising opportunities. A company that possesses VRIO valuable, rare, hard to imitate and organized resources has an edge over its competitors due to superiority of such resources.

If one company has gained VRIO resource, no other company can acquire it at least temporarily. The following resources have VRIO attributes: Intellectual property patents, copyrights, trademarks Brand equity Know-how Reputation Unique competences.

Competence is an ability to perform tasks successfully and is a cluster of related skills, knowledge, capabilities and processes. A company that has developed a competence in producing miniaturized electronics would get at least temporary advantage as other companies would find it very hard to replicate the processes, skills, knowledge and capabilities needed for that competence.

Most often, a company gains superiority through innovation. Innovative products, processes or new business models provide strong competitive edge due to the first mover advantage.

Two basic types M. Porter has identified 2 basic types of competitive advantage: Porter argued that a company could achieve superior performance by producing similar quality products or services but at lower costs. In this case, company sells products at the same price as competitors but reaps higher profit margins because of lower production costs.A model of CSR contribution to competitive advantage was built so as to study the relationship between CSR & CA.

What is competitive advantage?

CSR is divided into the main stakeholders - investors, employees, consumers, business partners, natural environment, community and government responsibility, using the description of corporate social responsibility and stakeholder.

Welcome VECTRA International provides innovative implementation of social responsibility strategies to both the public and private sectors to achieve a responsible competitive advantage.

We are an independent organization and we work through a network of CSR experts in over 20 countries. Oct 12,  · common belief that corporate social responsibility (CSR) as a business entity is used among CEO’s as a driving force for business operation and strategy to gain competitive advantage.

KEY WORDS: business strategy, CSR, competitive advantage, sustainability, shared value. References: 1. Michael E. Porter and Mark R.

Kramer, “Strategy and Society: The Link between Competitive Advantage and Corporate Social Responsibility” . Competitive advantage decays.

What is Corporate Social Responsibility? Advantages of CSR.

As painful and challenging as it can be for a business to build a competitive advantage — that advantage is often fleeting. External change such as competition, markets, business models, environment, customer preferences and technology deprecate your competitive advantage with time.

Corporate social responsibility (CSR) is a comprehensive strategy that aims to show employees, consumers and the community at large that a corporation is ethically responsible. In turn, consumers feel more inclined to give them their business.

However, some disadvantages do exist.

Corporate Social Responsibility – Competitive Advantage? Maybe.