What Is Sustainable Competitive Advantage?

Introduction Competitive advantage and its pursuit, for firms, is the cornerstone of Strategic Management. Strategy comes from the Greek word Stratos meaning army and its quest for sustainable competitive advantage is almost militaristic in nature (Fahy, 2000). It is steeped in theories of management and economics. In concepts of developing and using core competencies from collective learnings (Prahlad & Hamel, 1990) to earn economic rents (Amit & Schoemaker, 1993) through the sources deployed to achieve superior financial performance or superior marketplace performance (Bhardawaj, Varadarajan & Fahy, 1993). Its definition lies in strategically utilising firm resources and capabilities, to implement a differential value creating strategy,

Measures to assess advantages should involve accurately identifying drivers that can be leveraged (Day & Wensley, 1988). Since competitive advantage is hard to measure, it can be inferred from sustained periods of above average performance. By applying the VRIO framework these sources of sustainable competitive advantage can be uncovered (Barney, 1991; Rouse & Daellenbach, 1999) and their contribution to the overall assortment should be determined (Juttner & Wehrli, 1994). Firms should monitor "positive sum competition" where rivalry between firms expands and shapes the industry revealing new positions of advantage and eroding current ones (Porter, 2008). Pfizers case study (Chandler & Samaroo, 2010) proves that since the external environment remains dynamic it challenges the internal environment to overcome deficiencies or build new capabilities (Hart,

Barriers against current and potential competition should be strengthened through reinvestments and periodic reviewing for new sources (Bhardwaj et al, 1993). Firms should guard against confines like cognitive sunk costs, competency traps and cultural rigidity coming from the norms, beliefs, culture, politics and regulatory pressures in and around the organization that govern socially acceptable behaviour by ensuring that the institutional capital context surrounding resource capital is noted and managed (Oliver, 1997). Organisations should be cautious against going into extensive periods of strategy formulation by observing the length of competitive advantage cycles in light of transient advantage (McGrath, 2013) and also mind the existence of hypercompetition where advantages like innovation will be eroded away by newer firms (Wiggins & Ruefli,