Competitive advantage is quite similar to the concept of comparative advantage. In 1985, Porter proposed his theory of competitive advantage which states that the businesses should obtain such policies that encourages high quality products at high prices. A lot of competitive advantage depends on the availability of cheap labor and natural resources. The main objective of competitive advantage is to attempt to maximize the scale economies in goods which will allow them to charge premium prices. (Stutz and Warf 2009)
A competitive advantage can be gained over the competitors by a number of factors like offering a greater value by lowering the prices or by providing those greater benefits and charging a high price. Porter suggested 4 strategies that are usually adopted by companies in order to gain competitive advantage. The strategies depend upon the relation between the pricing and the differentiation that the company is offering and the customer base that they are catering to which could be either broad or narrow.
Next has obtained the cost leadership strategy and are catering to a broad customer base. They are near to differentiation also because they are offering their products with some differentiation also. Next should try to move away from the current positioning and should focus on either one of the completely.