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Distribution Cost Advantage

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Distribution Cost Advantage
A source of competitive advantage that depends on the efficient delivery of a product or service to customers.

Distribution Cost Advantage
A comparative advantage that one company has over another because of its ability to deliver goods or services more quickly and less expensively. For example, a flower delivery service in the town where the order was placed has a distribution cost advantage over an identical service out of state, as it can deliver flowers more quickly and cheaply.


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From a purely financial perspective, a distribution cost advantage of 50 basis points translates directly into an increase in return on equity of nearly 1.
 
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