Patents and Competitive Advantage

Patents

Government-granted rights to inventors to prevent others from using the invention without permission

Sustainable competitive advantage

Consistently outperforming industry averages in financial performance over time

Operational effectiveness

Performing tasks better than rivals, leading to higher profit margins and efficiency

Commodity

Basic, interchangeable goods or raw materials traded in the market

Fast follower problem

Rivals quickly entering the market with a comparable or superior product at lower cost, posing a challenge to the original innovator

Augmented reality

Technology superimposing digital content onto real-world images, enhancing user experience

Strategic positioning

Performing different tasks than rivals or performing the same tasks in a different way to gain a competitive edge

Inventory turns

Number of times inventory is sold or used during a given period, indicating the efficiency of inventory management

Straddling

Attempting to occupy multiple positions without matching the benefits of a focused rival, leading to strategic vulnerability

Resource based view of competitive advantage

Firm's control of exploitable resources with specific characteristics, contributing to sustained competitive advantage

Dense wave division multiplexing

Technology enabling existing cable fiber to carry more transmissions than before, increasing data capacity

Imitation resistant value chain

Hard-to-replicate way of doing business, protecting a company from imitative competition

Value chain

Interrelated activities bringing products or services to market, adding value at each stage of production and distribution

Brand

Symbolic embodiment of all information connected with a product or service, influencing consumer perception and loyalty

Viral marketing

Leveraging consumers to promote a product or service through word-of-mouth or sharing, creating exponential growth

Scale advantages

Advantages related to a company's size, leading to cost efficiencies and market dominance

Economies of scale

Cost spreading across increasing units of production or customer base, resulting in lower average costs

Switching costs

Expenses incurred by consumers to move to another product or service, creating barriers to customer churn

Learning costs

Costs associated with acquiring information and data, including research, development, and training expenses

Differentiation

Using technology or unique features to distinguish goods and services in a commodity market, creating competitive advantage

Network effects

Value of a product or service increasing as its user base expands, leading to a competitive advantage

APIs (application programming interfaces)

Programming hooks published by firms to guide other programs, enabling integration and functionality

Affiliates

Third parties promoting a product or service for a share of sales, expanding market reach

Non-practicing entities

Firms making money by acquiring and asserting patents, rather than marketing products, leading to legal disputes

Porter's five forces

Competition in the industry
Potential of new entrants into the industry
Power of suppliers
Power of customers
Threat of substitute products

Price transparency

Degree to which complete information is available, influencing market dynamics and consumer behavior

Information asymmetry

One party having more or better information than its counterpart in a decision situation, affecting negotiations and market efficiency