Effects of innovation on costs of pruduction in providing sustainable comptitive advantage and an empirical implementation

At rapidly changing world of nowadays and at an economic environment where global competition rising regularly; existence of foundations and their ability to have a voice on competition and the ability of gaining the sustainable competitive advantage depends on their skills of creating competitive advantage and innovative activities that results with having the edge over the competitors.The foundations that desire to gain advantage at this competitive environment are tried to provide this competitive advantage by having perfection at one of the strategies of cost, diversification and focusing. In addition to trying gain competitive advantage by having the perfection on mentioned strategies by innovative activities, foundations are struggling to keep the sustainability of this advantage. The source of keeping competitive advantage sustainable is the talent of the foundation about developing innovative activities. Due to innovation; foundations not only gaining cost advantage over counter foundations by the decreasing of the costs but also they provide competitive advantage by diversification of services and products.At first; competition and the theory of competition and innovation are told theoretically in this study. After that a foundation that produces glassware comes up. The innovative development at the procedure of the production of a bowl and the effect of this innovation on costs and on competitive advantage of the foundation are examined.Key Words: Competition, Skills, Sustainable Competitive Advantage, Competition Strategies, Innovation