economic growth due to Indutrialization
- Competitive Advantage is a condition in which a company dominates
other companies that sell the same products or services by making
a greater profit.
- Two ways to get a competitive advantage:
a. To lower the costs of producing their product or service.
b. To increase the amount of product or service sold.
Larger Profits through Lower Production Costs
- Three ways a company can lower its production costs:
a. By paying its workers less.
b. By using better tools and faster equipment.
c. By finding a cheaper source of natural
- Mass production gave some companies a competitive advantage by
providing efficiency to their work.
- Lower production costs by using better equipment and methods
gave Hill's Great Northern Railroad a competitive advantage.
- Other railroad companies began using Hill's methods because the
Great Northern Railroad was able to charge lower rates from these
- Vertical integration is a condition that a company is able to
control everything needed to make a product such as natural resources,
transportation, and tools and equipment.
- Vertical integration can lower production costs and give a company
a competitive advantage by not paying anyone a profit for the materials
needed for creating a product.
- Andrew Carnegie's steel industry is a good example of how vertical
integration can give a company a competitive advantage. He controlled
everything he needed to make and sell steel products (buying land
that contains iron ore, coal, and limestone; making favorable
agreements with other companies to buy his steel for making wire,
nails, and for constructions).