Sources of competitive advantage

Abstract

A hospital possesses a competitive advantage over its rivals when it either earns a higher profit in the provision of an equally differentiated service/product as its competitors, or when it distinguishes itself with an added value service compared to its competitors. Competitive advantages can derive either from external sources such as the emergence of new markets, new strategic allies or change in payer mix, or from internal sources such as incremental or radical innovation. This chapter discusses some of the types of competitive advantages extracted from cost leadership and service differentiation in addition to the principles used for a successful Implementation and sustainability of Value-Based Competition, namely the need to focus on value, to base competition on results and the development of evidence based medicine for all.