Competitive Parity vs Competitive Advantage | ||
Competitive Parity | Competitive Advantage | |
Definition | Average capabilities in a particular area as compared to others in your industry. | Superior or industry leading capabilities. |
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competitive parity vs competitive advantage
Competitive Parity vs Competitive Advantage John Spacey, updated on
Competitive parity is an area where you achieve standard or average results as compared to others in your industry. Competitive advantage is an area in which you achieve above average results in your industry, potentially surpassing all competition.In some cases, competitive parity results from a failure to outdo the competition. However, it can also be the result of a deliberate strategy to achieve standard results in a particular area. For example, a technology company may target competitive parity in their accounting department. If accounting has nothing do to with their core business model, they may simply desire to comply with laws and follow best practices and standards. The same company may aggressively seek to innovate to achieve competitive advantage in other areas such as product development and customer service.
Generally speaking, firms seek competitive advantages in areas related to their core business model. It often makes sense to target competitive parity in other areas.
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