Question

Choose two existing companies to evaluate: one large company (Safeway Super Market) and one small company (Grocery Outlet). Through research, develop a short list of their top three competitive advantages. Are these advantages sustainable in your opinion?

Answer 1

There are two companies: a large firm and a small firm. The advantages of each of them are given below. Advantages of a large firm: A large firm faces the economies of scale as due to its large size, the production increases, and with the increased output, the benefits arising from the economies of scale increases. Another advantage of being a large firm is that the firm gets the knowledge of the market. If a firm is large, there are many contacts that it builds and therefore, it gets the knowledge of which thing to purchase from where and from where the best quality products can be acquired. Another advantage of being a large firm is that it allows the firms to manipulate the price by changing its supply. The firms can easily reduce their supply, which increases the price. For a large firm, these advantages are sustainable. Advantages of a small firm: If the firm is small, its learning curve becomes upward sloping and there are a lot of learning potential for the firm. Being a small firm allows the companies to be away from the main competition yet take advantages of the innovations made by other big firms. Also, even though a large firm enjoys first-mover advantages, small firms enjoys in a way that they avoid the cost of innovating things and still enjoy from them.