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  • Subject area(s): Engineering
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  • Published on: 7th September 2019
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When a firm develops or acquires various attributes allowing it to outperform its considerable competitors, the outcome is in the form of a sustainable competitive advantage. All these attributes consist of aspects for accessing the natural resources or accessing the highly skilled and trained personnel. It can be considered as an advantage over the competitive aspect with the consideration about some life. This kind of benefit cannot be copied or replicated very easily and can be managed as well as maintained for a longer time period. Competitive advantage is considerable in the form of a key determinant of the greater performance while ensuring that there is prominent product placement and organizational survival in the market. Therefore, superior performance is the desired and ultimate objective and aim of an organization. As it provides the organization ability for staying ahead of the potential or exiting competition while ensuring the marketplace leadership, it is highly considerable to value aspects related to the resources, capabilities, core competencies, and the concept of sustainable competitive advantage. This paper will highlight these aspects while discussing them in an analytical viewpoint with the creation of sustainable competitive advantage (Boguslauskas & Kvedaraviciene, 2009).

Resource Based Sustainable Competitive Advantage

In 1991, Jay Barney came up with four varying criteria for determining the competitive capabilities of a firm in the marketplace and these criteria are as follows:-

• Are these resources really valuable or do they lead to enabling the devising of strategies that improve the effectiveness or efficiency of the firm?

• Are these resources rare or they are available with many other firms?

• Are these resources imperfectly imitable due to the unique historical aspects along with the socially complex and casually ambiguous aspects?

• Are these resources non-substitutable?

If all these criteria are matches, then an organization can said to have a considerable sustainable competitive advantage in the marketplace. In other words, the organization will have the marketplace advantage which will stand firm unless he criteria starting not meeting their potentials. It will lead to the high level of profit generation for the company against the competitive threats it comes across. Apart from these aspects, there is a need to consider the development of sustainable competitive advantage where in first of all, customer loyalty should be maintained. They should feel like coming back to the organization and it can be achieved with the help of loyalty programs, positioning, and branding. At the same time, there is a need to consider the importance of the resource-based model which is totally consistent with the contemporary concerns related to the social welfare related to the economists. It begins with certain stipulations where the firm resources are immobile and heterogeneous where it subsequently follows that an organization which exploits its particular resource benefits is simply running in a properly effectual and efficient manner. When it fails to exploit these resources, it can be considered as highly inefficient and does not lead to the social welfare maximization. Therefore resources are definitely supposed to be exploited in order to gain a sustainable competitive advantage (Hitt et al., 2016).

Firm Capabilities and Sustainable Competitive Advantage

Apart from understanding the importance of resources and customer loyalty, there is a need to understand the value of the firm’s capabilities as well.  The company should understand the value of information and distribution systems. Here, for example, retailing strategy should be focused upon having the most efficient and effective way for getting the products at very cheap rates while selling them at highly reasonable prices. The firm should have unique merchandise while developing and marketing the private label brands. There is a need to value customer service as it takes time for establishing something which one is supposed to establish. There should be multiple source advantage as it is always convenient to have more than one resource. A company with cheap rates, nice facilities and prominent customer service definitely leads to the development of strong reputation which in turn leads to the increase in the proper exploitation of firm’s capabilities. For understanding the real capabilities of a firm, there is a need to comprehend the concept of intrinsic capabilities. These capabilities include innovation engineering competency, general management skills, brand value, solid business networks and value secrets. These capabilities are not easily possessed and they are indirectly related to the effective resources inside the organization. All these unique capabilities offer a considerable opportunity for providing unique value creation in order to receive gains achieved with the consideration of the value. Uniqueness can definitely lead to the development of the courage, foresight insight, and imagination for pursuing it where it is new and different with no indications of its failure in the past. Strategic focus and innovation can also definitely lead to have an upper hand over the situation where sustainable competitive advantage can be achieved using the capabilities of the firm (Breton-Miller & Miller, 2014).

Core Competencies and Sustainable Competitive Advantage

When it comes to understand core competencies, it is important to know that there are very significant for shaping the business ideas across the world. Gary Hamel and C. K. Prahalad (1990) argued upon the uniqueness of aspects related to the core competencies. They used specific examples of now-forgotten and slowly developing mega corporations which could not succeed to capitalize and recognize on their particular strengths. They also led on to compare them with the star performers of 80s like Honda, Canon, and NEC understood the capitalistic needs and it led to their subsequent growth in the industry. These companies concentrated upon the development and exploitation of their core competencies. They constantly worked upon building and reinforcing them and they products were always advanced than the products of other competitors. Customers always recognized the value creation and were willing to pay for the lack of waste in their requirements. Therefore, customers also switched away from those areas in which they were weak and focused upon those areas where they had more strength. Apart from being very positive about core competencies, Hamel and Prahalad were very suspicious of them too and always tested the core competencies with three relative aspects as application breadth, imitation difficulty and relevance. Application breadth opens up a lot of doors in the form of potential markets. Imitation difficulty is something where competitors should not be able to imitate them easily. It permits the companies to offer products which are better than the products provided by the competitors. Relevance defines that the competence should be able to provide strong influence to the client for choosing the product or services offered by the company. There would not be a scope for the foundational strength in the competitive position and it cannot be considered as a core competency any more (Morris et al., 2006).

Value Chain Analysis and Sustainable Competitive Advantage

When it comes to understand the concept of sustainable advantage, there is a need to consider the aspect of value chain analysis too where the primary and support activities are highly considerable. Primary activities are related to the physical creation of the product along with the sales and distribution of buyers. On the other hand, support activities are related to the provision of necessary assistance for the respective primary activities. This consists of the aspects related to the inclusion of the firm’s procurement, technological development, HRM, and infrastructural aspects. There is a direction relation of the sustainable advantage with the company’s supply chain, operations, distribution, sales and marketing and service provision (Mahoney & Kor, 2015).


Sustainable competitive advantage is useful for the purpose of marketing integration and having a leading edge in the industry. But it is difficult to have it in the organization without proper management of resources, capabilities and core competencies. There is always a need to establish the brand loyalty where the customers should feel like being loyal to the firm. Product should be patented where other competitors should not be able to imitate it easily. The firm is always supposed to innovate continuously without any relevant consideration of ups and downs in the market. All the hired team members should be clear about the vision and feel related to the organization. This kind of commitment can definitely increase the ability of the company to match as well as secure the contracts. There should be provisions related to the incentives and long term contracts. Unique resources, identified and exploited capabilities, business oriented core competencies are essential for having a sustainable competitive advantage in the industry. Without any consideration of these aspects, companies always run at a risk of falling down and cannot sustain the competitive advantage over long time. Therefore, their presence in the company is directly proportional to the sustainable competitive advantage

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