Can competitive advantage be sustainable

Culture defines sustainable competitive advantage. People The caliber of people in your organization to a very large extent will determine the sustainability of your competitive advantage as a business.

Can competitive advantage be sustainable

The key component for business success. Definition Competitive advantage means superior performance relative to other competitors in the Can competitive advantage be sustainable industry or superior performance relative to the industry average.

There is no one answer about what is competitive advantage or one way to measure it, and for the right reason. Nearly everything can be considered as competitive edge, e. Every company must have at least one advantage to successfully compete in the market. There are many ways to achieve the advantage but only two basic types of it: A company that is able to achieve superiority in cost or differentiation is able to offer consumers the products at lower costs or with higher degree of differentiation and most importantly, is able to compete with its rivals.

An organization that is capable of outperforming its competitors over a long period of time has sustainable competitive advantage. The following diagram illustrates the basic competitive advantage model, which is explained below in the article: How a company can achieve it?

An organization can achieve an edge over its competitors in the following two ways: When PEST factors change, many opportunities can appear that, if seized upon, could provide many benefits for an organization.

A company can also gain an upper hand over its competitors when its capable to respond to external changes faster than other organizations.

By developing them inside the company. A firm can achieve cost or differentiation advantage when it develops VRIO resources, unique competences or through innovative processes and products.

Can competitive advantage be sustainable

When these factors change many opportunities arise that can be exploited by an organization to achieve superiority over its rivals. For example, new superior machinery, which is manufactured and sold only in South Korea, would result in lower production costs for Korean companies and they would gain cost advantage against competitors in a global environment.

Can competitive advantage be sustainable

For example, Subway and KFC. If opportunities appear due to changes in external environment why not all companies are able to profit from that? The advantage can also be gained when a company is the first one to exploit the external change. Otherwise, if a company is slow to respond to changes it may never benefit from the arising opportunities.

A company that possesses VRIO valuable, rare, hard to imitate and organized resources has an edge over its competitors due to superiority of such resources. If one company has gained VRIO resource, no other company can acquire it at least temporarily. The following resources have VRIO attributes: Intellectual property patents, copyrights, trademarks Brand equity Know-how Reputation Unique competences.

Competence is an ability to perform tasks successfully and is a cluster of related skills, knowledge, capabilities and processes. A company that has developed a competence in producing miniaturized electronics would get at least temporary advantage as other companies would find it very hard to replicate the processes, skills, knowledge and capabilities needed for that competence.

Most often, a company gains superiority through innovation. Innovative products, processes or new business models provide strong competitive edge due to the first mover advantage. Two basic types M. Porter has identified 2 basic types of competitive advantage: Porter argued that a company could achieve superior performance by producing similar quality products or services but at lower costs.

In this case, company sells products at the same price as competitors but reaps higher profit margins because of lower production costs. The company that tries to achieve cost advantage like Amazon. Higher profit margins lead to further price reductions, more investments in process innovation and ultimately greater value for customers.

Differentiation advantage is achieved by offering unique products and services and charging premium price for that.Whether you’re pitching investors or launching a new product, success is more likely if you can create and communicate a sustainable competitive advantage.

Whether you’re pitching investors or launching a new product, success is more likely if you can create and communicate a sustainable competitive advantage. Being the market leader and having a great corporate reputation can be part of a powerful brand and a competitive advantage.

Strategic assets Patents, trademarks, copy rights, domain names, and long term contracts would be examples of strategic assets that provide sustainable competitive advantages. Nov 08,  · A sustainable competitive advantage is a long-term strategy or process that allows a business to remain ahead of its competitors.

Unlike short-term advantages, such as being the first to market a new type of product, a sustainable competitive advantage may be built into the fabric of a business, and will help maintain its dominance over years and even decades.

In , Harvard Business School professor Michael Porter wrote "Competitive Advantage." It is the definitive business school textbook on the wrote it to help companies can create a sustainable competitive advantage.

Overall, a sustainable competitive advantage requires value-creating products, processes, and services that cannot be matched by competitors now, and plan content to maintain that position as you.

Competitive Advantage - Strategic Management Insight