1 Why are competitive advantages based on brands as in the c

Solution

Competitive advantages through product quality innovation is a desirable thing for the organizations in this sector, however this is not sustainable for the firm as other competitors eventually catches up on the innovation and the competitive edge wears off.

On the other hand, a superior brand image which is also resulting from better product and service quality and a feeling of trust among the customers is more long lasting and creates stickiness of customer base. Thus companies having better brand appeal have more loyal customer base and they have to spend lesser in order to retain the customers. This is because the brand assures the customers about the value and quality of the product and service. Moreover imitating the brand appeal by competitors is not easily possible and hence, it proves to be a bigger competitive edge for the companies.