Sustainable Competitive Advantage

Topics: Strategic management, Management, Marketing Pages: 2 (688 words) Published: April 11, 2012
Sustainable competitive advantage (SCA) is a theory connected with Porter’s theory of competitive advantage. SCA is an component of business strategy that delivers a significant advantage over the competition, both existing and future. The theory suggests that firms should pursue policies that •are meaningful, substantial and sustainable,

are modified, enhanced and supported over time,
are detectable to the customer and delivers or improves a value proposition •and link the SCA with the firms position in the market (Formulation, 2010). To identify SCA, the firm must first identify and understand its competitive advantage. The assets and core competencies of a firm are typically difficult to imitate and therefore denote the most sustainable components of a business strategy. Porter and Cramer (2002) identified a list of questions that could help the firm to recognize, establish or nurture a SCA. •Is it difficult for the competition to match, advance or imitate the advantages? •Will the resource depreciate?

Do customers see a constant, notable differentiation between me and my competitors? •Can a unique resource be replaced by a lower cost resource? •Does it build the firm’s reputation in the industry and brand position? •Can the activities involved in creating the competitive advantage be constantly improved?” Much of the goal of business strategy is to attain SCA. The firm has established SCA when it provides “value-creating products, processes and services for its’ customers that cannot be duplicated or imitated by the competition” (Porter, 1985). The longer it takes the competition to match the firm’s offering, the more sustainable the advantage is (Porter, 1985). Porter (1985) contended that a business can foster SCA based on cost, differentiation, or both, as shown in Appendix A, Figure 1. Apple is a perfect example of a company who has established SCA through strategic maneuvering and differentiation - doing something different from...
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