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Problem

In addition to cost advantages, describe the other ways that rapidly developing economies can contribute to competitive advantage.

Step-by-step solution

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Step 1/2

Competitive advantages allow the firms to provide products and services to the customer better than their rivals can provide. One firm can attain a competitive advantage in various forms ranging from production to customer service.

Step 2/2

One of the most common competitive advantages that firms concentrate on is the cost advantage. In addition to the cost advantage, there are some services or ways in which the firms gain a competitive advantage. They are as follows. First of all, by gaining market access. Firms can get a competitive advantage as they enter into fast-growing markets. For example, China and India are the fastest growing economy and entering these countries can help to attain a competitive advantage. A new line of businesses can be introduced in these growing economies to gain market dominance. Secondly, capabilities advantages. This explains the use of human talent in the countries. The human capital is high in the fastest-growing countries in terms of population. China and India have the highest population comprising youths. They are highly talented and engineering or management graduates. Firms can use these talents by outsourcing or by recruiting them. This way research and development, customer needs, and product quality can be improvised. Finally, outsourcing decision. To use human talent and technological improvement, the firm can outsource their research and development or customer service wing to the developing countries. India is one of the highest outsourcing countries. This can also help the firm in other countries to gain a competitive advantage by getting highly focused and improved performances.