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CHAPTER 7 COMPETITIVE ADVANTAGE IN TECHNOLOGY …

CHAPTER 7 COMPETITIVE ADVANTAGE INTECHNOLOGY INTENSIVEINDUSTRIESF rank T. RothaermelABSTRACTThis CHAPTER introduces the reader to the meaning of competitiveadvantage and posits that a firm s strategy is defined as the managers theory about how to gain and sustain COMPETITIVE ADVANTAGE . The authordemonstrates how a firm creates its COMPETITIVE ADVANTAGE by creatingmore economic value than its rivals, and explains that profitabilitydepends upon value , price, and costs. The relationship among these factorsis explored in the context of high- TECHNOLOGY consumer goods-laptopcomputers and cars.

perceived value of a good, for example, is assigned by customers based on the product’s features, performance, design, quality, and so on. ... Thus, V-P is the value the consumer captures (or consumer surplus), P-C is the profit margin, …

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