BusinessStrategic

Factors Affecting Sustainability Of A Competitive Advantage

Factors Affecting Sustainability Of A Competitive Advantage :

The obsolescence of a core competence, the basis of the value creating strategy, as a result of environmental changes is considered a Factor Affecting Sustainability Of A Competitive Advantage.

  1. The availability of substitutes for the core competence, or the extent to which competitors can use different core competencies to overcome value created by the original core competence.
  2. The limit ability of the core competence, or the abilities of competitors to successfully develop the same core competence.To sustain a competitive advantage, companies must be able to manage current core competencies while simultaneously developing new competencies. In other words, strategists must continuously make investments that will both enhance the value of current competencies while striving to develop new ones. Failure to develop or sustain a competitive advantage, or at least to maintain competitive parity, means that a company is likely to go out of business.

The sustainability of any competitive advantage achieved will be determined by how successfully other companies imitate a company’s strategies. Thus, a major challenge is that companies must continuously search for additional sources of competitive advantage and continuously implement them to stay ahead of competitors.

Analyzing the external environment enables a company to identify what it might do by identifying what opportunities exist. Analyzing the internal environment enables a company to identify what it can do or is capable of doing. The challenge is for companies to achieve a match between what the company might do and what it can do.

This match allows the develop­ment of a company’s strategic intent and strategic mission, as well as the subsequent implementation of value creating strategies that will result in strategic competitiveness and above average returns.Thus, the outcomes of the external and internal analyses of a company’s environment must be linked and not treated as separate and distinct.

Analyzing the external environment enables strategists to identify opportunities that the company can choose to pursue if it is capable of doing so successfully. This capability is determined by a careful analysis of the company’s internal environment, or by determining whether or not it has the resources, capabilities, and core competencies that will enable it to successfully implement value creating strategies that fit with its strategic mission and strategic intent

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