Sustainable Competitive Advantage In general, capabilities and resources become strengths with the potential to create a competitive advantage if the following conditions are met: The resources or capabilities are valuable. They allow the firm to exploit external opportunities and/or neutralise external threats. If a firm’s resource or capability allows exploitation of opportunities or neutralisation of threats then it is considered a strength. 2.The resources or capabilities are unique. If only one or a small group of organisations possess a valuable resource or capability, then that resource or capability may be a source of competitive advantage. If numerous organisations possess a particular resource or capability, then the situation is described as competitive parity – no company has the advantage. 3.The organisation must be suited to the exploitation of the resource or capability. This means that the structure and systems of the firm are appropriate for taking advantage of the competitive advantage. 4. The firm’s managers are aware of the potential of the resource or capability to lead to a competitive advantage and have taken steps to realise the advantage (dynamic capabilities). 5.The resources or capabilities are difficult or expensive to imitate. In these situations, competing firms face a cost disadvantage in imitating a resource or capability. The more difficult or costly a resource or capability is, the more valuable it is in producing a sustainable competitive advantage. In the case of an enforceable patent or a trademark, competing firms face an absolute cost disadvantage. 6.No readily available substitutes exist Based on the above sustainable advantages: Use any of the 4 ways, and discuss how your team can attain a sustainable competitive advantage in the local market as an Environmental Friendly Vehicle Business. Give rationales for each answer.
Sustainable Competitive Advantage
In general, capabilities and resources become strengths with the potential to create a
competitive advantage if the following conditions are met:
- The resources or capabilities are valuable. They allow the firm to exploit
external opportunities and/or neutralise external threats. If a firm’s resource or
capability allows exploitation of opportunities or neutralisation of threats then
it is considered a strength.
2.The resources or capabilities are unique. If only one or a small group of
organisations possess a valuable resource or capability, then that resource or
capability may be a source of competitive advantage. If numerous organisations
possess a particular resource or capability, then the situation is described as
competitive parity – no company has the advantage.
3.The organisation must be suited to the exploitation of the resource or
capability. This means that the structure and systems of the firm are appropriate
for taking advantage of the competitive advantage.
4. The firm’s managers are aware of the potential of the resource or capability to
lead to a competitive advantage and have taken steps to realise the advantage
(dynamic capabilities).
5.The resources or capabilities are difficult or expensive to imitate. In these
situations, competing firms face a cost disadvantage in imitating a resource
or capability. The more difficult or costly a resource or capability is, the more
valuable it is in producing a sustainable competitive advantage. In the case of
an enforceable patent or a trademark, competing firms face an absolute cost
disadvantage.
6.No readily available substitutes exist
Based on the above sustainable advantages:
- Use any of the 4 ways, and discuss how your team can attain a sustainable competitive advantage in the local market as an Environmental Friendly Vehicle Business.
- Give rationales for each answer.
Please provide in-text citation and references.
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