Sustainable Competitive Advantage

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What is a Sustainable Competitive Advantage (SCA)? Meaning.

If a company makes a profit in excess of its Cost of Capital, it is probably able to do so because it has achieved a Competitive Position that offers some kind of an 'edge' over its current or potential rivals. To achieve such a temporary competitive edge is hard to do, and typically takes the successful formulation and execution of a business strategy. The 3 factors that can provide such a Competitive Advantage were famously described by Porter: Cost Leadership, Differentiation, and Focus. A different  approach was provided by Treacy and Wiersema in their Value Disciplines: Operational Excellence, Product Leadership and Customer Intimacy.

But to develop a competitive advantage into a sustainable competitive advantage is even harder to do, because this means that the company must possess value creating things or capabilities that cannot be duplicated or imitated by other firms (Competitive Defendability), nor can they be made redundant by developments in the environment (Environmental Consonance). Therefore SCA could be defined as the prolonged benefit of formulating and implementing some unique value-creating strategy not simultaneously being implemented by any current or potential competitors along with the inability to duplicate or imitate the benefits of this strategy and the absence of threatening market developments.

Sources of Sustainable Competitive Advantage.

In 1988, Day and Wensley mentioned two categorical sources involved in creating a competitive advantage: superior skills and superior resources (financial, physical, legal, human, organizational, informational, relational). Since then many  authors have elaborated on the specific skills and resources that can contribute to a SCA. Barney (1991) states that not all firm resources hold the potential of SCAs; instead, they must possess all of four attributes: Valuable, Rare, Imperfectly Imitable and Non-Substitutable ("VRIN"). See Resource Based View of the Firm.

Prahalad and Hamel suggest in 1990 that firms combine their resources and skills into Core Competences, loosely defined as that which a firm does distinctively well in relation to competitors. Therefore, firms may succeed in establishing an SCA by combining skills and resources in unique and enduring ways. 

Also called sustained competitive advantage.

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Sustainable Competitive Advantage Special Interest Group.

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Forum about Sustainable Competitive Advantage.

🔥 NEW Sustaining your Competitive Advantage Means Ongoing Change
Maintaining or sustaining your competitive advantage actually means making ongoing conscious agile decisions and directi (...)
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Are you a Strategist? You have a Key Role in Creating Sustainable Competitive Advantage
Most organizational performance theories assume that there are certain “best practices” or “best ways” needed to outperf (...)
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Sustainable Competitive Advantage for Technology-based (Internet) Firms
A survey on all 29,688 companies listed on U.S. Stock market from 1960 to 2009 revealed that recent firms, listed from 2 (...)
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2 Different Views Towards 'Sustainability'
Note there is a confusion in terminology: - There is the discussion about creating and capturing value based on competi (...)
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Best Practices

The top-rated discussion topics about Sustainable Competitive Advantage. Here you will find the most valuable ideas and practical suggestions.

🥇 Sustainable Competitive Advantage and Increasing Profit
Is a Sustainable Competitive Advantage important to make more profit? (...)
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🥈 Transient Advantage
According to Colombia BS Professor Rita Gunther McGrath, achieving a Sustainable Competitive Advantage (SCA) (establishi (...)
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🥉 Sustainable Alignment?
What is sustainable alignment? (...)
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How to Define SCA of a Business?
How can we analyze information about a business such as its resources, capabilities, , exploitable and so on...? (...)
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Can Customer Experience Create Sustainable Competitive Advantage?
Amazon sell books (well they started with books)...Zappos sell shoes (well they started with shoes)... Neither make what (...)
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Expert Tips

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The Key Role of Strategists in Creating Sustainable Competitive Advantage

Business Strategy, Corporate Strategy, Competitive Advantage, Strategy Education (...)
Information Sources

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How to Sustain Competitive Advantage?

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Developing a (Sustainable) Competitive Advantage

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Porter: Misconceptions about Strategy and Competitive Advantage

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Compare with: Barriers to Entry  |  Cost Drivers  |  Cost Dynamics  |  Cost Analysis  |  Oligopoly  |  Competitive Intelligence  |  Competitive Environment  |  PEST Analysis  |  First Mover Advantage  |  Second-mover Strategy

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