A-Z Popular Blog Competition Search »
Competition
 Advertisements
Related Guides

11 Types of Economic Advantage

 , updated on March 22, 2021
An economic advantage is a position or capability that allows you to outperform in a particular market. It's a similar concept to competitive advantage but at the level of economic fundamentals. The following are a few types of economic advantage.

1. Economies Of Scale

The tendency for cost per unit to drop as you produce more of a product or service. Economies of scale is often due to dilution of fixed costs such as factories and shared costs such as marketing.

2. Economies Of Scope

Efficiencies related to offering a wide variety of products and services. Costs such as operational expenses can be shared across multiple products. It is also possible for multiple products to leverage assets such as a brand. In some cases, economies of scope is related to customer preferences for a variety of choices such as the thousands of items offered by a large supermarket.

3. Information Asymmetry

A situation where you have better or faster information than others in the same market or industry.

4. Absolute Advantage

The ability to produce more than your competitors with each unit of resources such as labor, capital and land. For example, the ability to grow more grapes per acre of farm. Generally translates into a cost advantage.

5. Bargaining Power

Bargaining power is the ability to influence in negotiations. It is often related to how much you have to lose if an agreement isn't reached. In other words, you tend to have a better position when you have little to lose.

6. Barriers To Entry

Barriers to entry is how difficult it is for new competitors to enter your market.

7. Critical Mass

The volumes needed to be efficient or for a product to catch on.

8. Market Power

Market power is the ability to affect the market price for a product or service. Usually restricted to large competitors that dominate a market. In some cases, the price of a major competitor acts as a price umbrella that impacts everyone in a industry.

9. Network Effect

The network effect is the tendency for the value of a product, service or technology to be proportional to the number of people who use it.

10. Switching Barriers

Switching barriers are the obstacles that your customers face to switch from your products or services to a competitor.

11. Economies Of Density

Locating in a dense urban environment such as in a city or within close reach of multiple cities allows more efficient access to labor, resources and customers.

Competitive Advantage

This is the complete list of articles we have written about competitive advantage.
Captive Market
Competitive Environment
Competitive Factors
Competitive Parity
Competitive Pressure
Competitive Threat
Competitor
Cost Competition
Disadvantage
Fair Competition
Greed Is Good
Growth
Imperfect Competition
Market Change
Market Economy
Mergers
Meritocracy
Monopoly
Oligopoly
Outrun The Bear
Perfect Competition
Substitute Good
More ...
If you enjoyed this page, please consider bookmarking Simplicable.
 

Competition

A list of ways to compete in a crowded market.

Competitive Advantage

A few sources of competitive advantage for businesses.

Competitive Benchmarking

A definition of competitive benchmarking with examples.

Competitive Disadvantage

A few examples of a competitive disadvantage.

Competitive Parity vs Competitive Advantage

The difference between competitive parity and competitive advantage.

Competitive Threat

The common types of competitive threat.

Market Economy

The definition of market economy with examples.

Competitive Market

A complete overview of competitive markets with examples.

Win-Lose

The definition of win-lose with examples.

Monopoly

The definition of monopoly with examples.

Alpha vs Beta

The difference between two common investment measurements.

Regression Toward The Mean

An overview of Regression Toward The Mean.

Efficient Market Hypothesis

An overview of the Efficient Market Hypothesis.

Animal Spirits

An overview of animal spirits, a theory of investing.

Financial Markets

A definition of financial market with examples.

Mr Market

A definition of Mr. Market, an investing theory.

Organic Growth

A definition of organic growth with examples.

Concept Company

The common types of concept company.

Information Costs

A definition of information costs with examples.

Channel Check

The definition of channel check with examples.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map