Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
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Sustainable Competitive Advantage

In general, capabilities and resources become strengths with the potential to create a

competitive advantage if the following conditions are met:

  1. 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:

  1. 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.
  2. Give rationales for each answer.

Please provide in-text citation and references.

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