A Tool for Diagnosing the Sustainability of a Business' Competitive Advantage

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Luis Eduardo Herrera Gonzalez
Strategy Consultant, Colombia

A Tool for Diagnosing the Sustainability of a Business' Competitive Advantage

🔥NEW Here is a model that I find very useful (and graphical) for analyzing the sustainability of your competitive advantage. The Tetra-Threat Model by the professors Pankaj Ghemawat and Jan Rivkin.

( Tetra-Threat Model )

In this framework, the Added Value that you as a company provide to your chain of value, might be threatened by Imitation or Substitution while the value that you are able to capture as part of your participation in the mentioned chain of value might be threatened by Slack or Holdup.

Imitation happens when the resources and activities which provide your superior performance are no longer scarce and therefor the added value that you provide your customers might be diminished by others who can provide the same products/services increasing the industry rivalry.
Substitution happens when your customers can find ways to solve their problems by reaching others rather than you. Not to go any further, the introduction of new technologies facilitated the Netflix business model which led to former Blockbuster's customer to find a better way to watch movies. We all know how the story ended up. 12-10-2021

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