A sustainable competitive advantage means a company has developed a unique position concerning its competitors, allowing it to outperform them consistently. Such an advantage can be achieved by continuously developing existing and new resources and capabilities in response to changing market conditions.
It must also be noted that a firm can lose its competitive advantage when competitors make strategic changes. A classic example is Sears, which lost its competitive advantage to Wal-Mart due to Wal-Mart’s successful implementation of its superior decision support system.
The rapid rate of technological change can also cause the business strategy to lose traction in the short term. Combine that with the reality that customer loyalty can wane very quickly and affect sales and market share, thus erasing any competitive advantage
The competition is stiff because a company’s strategy can be replicated and often quickly.
Every business has a competitive strategy. However, many strategies are implicit, having evolved over time rather than being explicitly formulated from the thinking and planning process. Implicit strategies may lack focus, produce inconsistent decisions, and unknowingly become obsolete. Without a well-defined strategy, organizations will be driven by current operational issues rather than by a planned future vision.
The case of Apple: ability to think different
Apple’s philosophy has always been to create products that consumers will find easy to use and marry innovative technology to work productivity and personal entertainment. Throughout its history, Apple Inc. has accomplished these goals.
The case of Kodak:
While other firms in the film business (e.g. Fuji) embraced the move away from film by owning the digital compact camera market early in this transition, Kodak’s emphasis was in extending the life of film-based technologies; this strategy was a failure from which the company could not recover. Kodak introduced its first digital camera in 2001, more than a decade later than others, despite employing the inventor of the digital camera in 1982.
See http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/
How can competitive advantage be sustainable?
- The firm must seek competitive advantage in combining resources & capabilities
- Develop resources and capabilities which are rare, valuable, and non-tradable
- Make those resulting competencies sustainable by precluding imitation or substitution by competitors
- The firm must offer competitive products
For any company to remain highly competitive, Management plays a key role because its greatest responsibility is ensuring its growth and sustainability. They decide and guide the organisational strategy to ensure its realisation. When the organisational strategy is right, the means to achieve it become easy to implement.
