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Absolute Cost Advantages
Cost advantages that are not easily replicated by competitors.
Implications
Applied when a company has a significant cost advantage due to technology, scale, or access to cheaper resources. Often used in competitive strategy analysis.
Example
Example: Saudi Aramco has an absolute cost advantage in oil production due to the region's vast, easily accessible oil reserves.
Related Terms
Different from comparative advantage, which focuses on relative efficiency rather than the absolute cost.
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