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A firms profitability is a function not only of industry conditions, but also of the amount of value it creates relative to it's competitors. The amount value the firm creates in comparison depends on it's cost and differentiation positions relative to competitors. No business can exist without creating positive value, and to achieve a competitive advantage it must add more value that it's competitors...
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No business can exist without creating positive value, and to achieve a competitive advantage it must add more value that it's competitors.
Added value is the difference between the market value of a firm's output and the value which it's inputs would have in comparable activities undertaken by other firms...
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