Competitive Strategy, CSR and Environmental Liability

Competitive Strategy and Competitive Advantage

Competitive strategy: The search for a favorable position in a given sector. The basis for achieving this favorable position is achieving some type of competitive advantage that enables the company to perform better than its competitors. Three possible strategies:

• Cost leadership
• Differentiation
• Segmentation or creating niche markets

Corporate Social Responsibility

Corporate social responsibility (CSR): This refers to all legal and ethical commitments that a company undertakes to care for and improve the social, labor, and environmental impacts of its activities.

Areas of Social Responsibility

• Commitment to society
• Building trust with employees
• Credibility with customers and consumers
• Respect for the environment

Environmental Liability

Not all the effects that companies generate in their environment are desirable. Companies generate goods and services, employment, wealth, etc., but also consume energy and scarce natural resources faster than they can regenerate, and produce pollution and waste at levels higher than nature can assimilate, among other negative effects.

Environment and Competitive Strategy

Given these changes in the environment, companies that adopt a passive attitude and consider that environmental responsibility makes them less competitive—for cost reasons such as changes in production equipment or installation of pollution control systems—may be at a disadvantage. However, a positive and strategic approach to the environment is considered a fundamental part of the business environment; its effect is similar to other changing environmental factors.

Sustainable Development

Sustainable development: Seeks to ensure that economic activities meet the needs of present generations without compromising the ability of future generations to meet their needs.

Condition of Entrepreneurs

Condition of entrepreneurs: Applies to all persons who carry out economic activities professionally and regularly on their own behalf, and to all commercial companies in any legal form.

Industrial Property

Industrial property: A set of exclusive rights that protect innovations manifested in new products, new processes, or new designs, as well as commercial activity through the identification of exclusive products and services offered on the market.