How competitive advantage make companies sustainable?
In the early 1990s, some analysts claimed that given only the brand as collateral, CocaCola would be able to borrow $100 billion. After some image tainting quality problems in 1999, this value has fallen, but it still remains well above number two Microsoft ($57 billion).
However, to date, young Internet shoppers are not brand loyal, they prefer site/product utility features to simple branding. In the future, however, the Internet should be able to generate value through brands.
As Table above points out, brands can be an extremely valuable asset to a company and its global competitiveness. This table lists the top 10 global brands by value, reporting the brand name and its ranking, and the value of the brand.
Companies such as CocaCola, Goldman Sachs, Sony Corporation, Nike, and McDonald’s have implemented value creating strategies using their unique resources, capabilities, and core competencies. In particular, they have developed unique capabilities related to the management of their brands.
The ultimate goal of such strategies is for the companies to achieve a sustainable competitive advantage that will enable them to earn above average returns. To achieve strategic competitiveness and earn above average returns, companies must leverage their core competencies to take advantage of emerging opportunities in the external environment.
Several features of the global economy, such as technological changes, can result in the erosion of the competitive advantage of established competitors. The Internet is undermining the competitive advantage of pure brick and mortar rivals. Scanners at the checkout provide retailers with information regarding the effects of price promotions on sales. Global players undermine the local players in their home turf.