* No competitive advantage lasts forever.
* Over time, rival use their own unique resources, capabilities, and core competencies to duplicate the focal firm’s ability to create value for customers. * With globalization, sustainable competitive advantage is especially challenging. * Firms must exploit their current advantages while simultaneously using their resources and capabilities to form new advantages that can lead to future success. * Innovation and people are critical resources for organization in their quest for competitive advantage. * Analyzing the internal organization
* the context of internal analysis: Figure 3.1 Component of an internal analysis * Creating value: By innovatively bundling and leveraging their resources and capabilities by exploiting their core competencies or competitive advantages, firms creative value. Value is measured by: Product performance characteristics, Product attributes for which customers are… Above-average returns
* Resources, Capabilities and Core competencies
* Four specific criteria of sustainable competitive advantage capabilities that are : valuable, rare, Costly-to-imitate, Nonsubstitutable capabilities * Competitive consequences: focus on capabilities that yield competitive parity and either temporary or sustainable competitive advantage. * Performance implications include:
* Parity = average returns
* Temporary advantage = avg.to above avg.returns.
* Sustainable advantage = above average returns
* Value Chain Analysis: