Seven characteristics describe the most competitive companies:

Market share matters: The 80th share point isn’t as important as the 81st, but don’t let it drop to 79!
Understand and remember precisely what business you are in.
Whether it’s broke or not, fix it – make it better; whether it be products or the whole company.
Innovate or evaporate; particularly [...]

There are several examples of industries where economies of learning play an important role, including the software industry and high-tech sectors.

Economies of scale represent the classic source of cost advantage. It basically refers to a situation where a firm can decrease the average cost per unit by increasing the total output. Economies of scale is also equivalent to an increase returns to scale situation, meaning that if we increase the inputs by X% the outputs will consequently increase by more than X%.

The business world is no different. In our fast paced economy change is the only certainty, and the faster companies are able to respond to such changes the higher their chances of success. The ability to respond and adapt quickly to market changes, in fact, is a source of competitive advantage.

Competitive advantage grows out of value a firm is able to create for its buyers that exceeds the firm’s cost of creating it. Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price.