Sustainable competitive advantage
(also abbreviated as SCA)
(also abbreviated as SCA)
DESCRIPTION
An element of a business or marketing strategy that provides a meaningful advantage over both existing and future competitors.
An element of a business or marketing strategy that provides a meaningful advantage over both existing and future competitors.
KEY INSIGHTS
While there are many possible strategic options that provide routes to a sustainable competitive advantage or SCA (e.g. quality, product design, value through low production costs, etc.) obtaining a highly effective SCA is often difficult to achieve as it means the SCA is both substantial and difficult to imitate or replicate by competitors. An SCA provides a firm with an advantage relative to competing firms that is able to be sustained by the firm and not easily eroded by competitors over time. As such, a firm may have a competitive advantage in that they are able to offer consumers greater value (e.g. through low prices or more benefits at a higher price) relative to that of competing firms, but such competitive advantages may not be sustainable, as when the rate and benefits of technological change outpace the firm’s abilities to take advantage of such changes. Whatever strategic options are chosen by a firm, managers should recognize that the strategy should exploit organizational assets and competencies and neutralize weaknesses. Much of marketing strategy development and implementation is concerned with the pursuit of SCAs by a firm.
While there are many possible strategic options that provide routes to a sustainable competitive advantage or SCA (e.g. quality, product design, value through low production costs, etc.) obtaining a highly effective SCA is often difficult to achieve as it means the SCA is both substantial and difficult to imitate or replicate by competitors. An SCA provides a firm with an advantage relative to competing firms that is able to be sustained by the firm and not easily eroded by competitors over time. As such, a firm may have a competitive advantage in that they are able to offer consumers greater value (e.g. through low prices or more benefits at a higher price) relative to that of competing firms, but such competitive advantages may not be sustainable, as when the rate and benefits of technological change outpace the firm’s abilities to take advantage of such changes. Whatever strategic options are chosen by a firm, managers should recognize that the strategy should exploit organizational assets and competencies and neutralize weaknesses. Much of marketing strategy development and implementation is concerned with the pursuit of SCAs by a firm.
KEYWORDS Competitive advantage, sustainability, marketing strategy
IMPLICATIONS
Marketers should recognize that a major aim of a firm’s marketing strategy should be to achieve and maintain a sustainable competitive advantage. While almost all SCAs may be only temporarily achieved in the long run, their pursuit should nevertheless be the foremost consideration in strategic decisions including the way the firm decides to compete (e.g. its product strategy, manufacturing strategy), its basis of competition in terms of assets and competencies, what is offered in terms of its value proposition, and its choice of where to compete in terms of productmarket and competitor selection.
Marketers should recognize that a major aim of a firm’s marketing strategy should be to achieve and maintain a sustainable competitive advantage. While almost all SCAs may be only temporarily achieved in the long run, their pursuit should nevertheless be the foremost consideration in strategic decisions including the way the firm decides to compete (e.g. its product strategy, manufacturing strategy), its basis of competition in terms of assets and competencies, what is offered in terms of its value proposition, and its choice of where to compete in terms of productmarket and competitor selection.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Bharadwaj, Sundar G., Varadarajan, P. Rajan, and Fahy, John (1993). ‘Sustainable Competitive Advantage in Service Industries: A Conceptual Model and Research Propositions,’ Journal of Marketing, 57(4), October, 83–99.
Bharadwaj, Sundar G., Varadarajan, P. Rajan, and Fahy, John (1993). ‘Sustainable Competitive Advantage in Service Industries: A Conceptual Model and Research Propositions,’ Journal of Marketing, 57(4), October, 83–99.
Mata, Francisco J., Fuerst, William L., and Barney, Jay B. (1995). ‘Information Technology and Sustained Competitive Advantage: A Resource-Based Analysis,’ MIS Quarterly, 19(4), December, 487–505.
Fahy, J. (2002). ‘A Resource-Based Analysis of Sustainable Competitive Advantage in a Global Environment,’ International Business Review, 11(1), February, 57–77.
Williams, Jeffrey R. (1992). How Sustainable is your Competitive Advantage? Berkeley and Los Angeles: University of California Press.
Vorhies, Douglas W., and Morgan, Neil A. (2005). ‘Benchmarking Marketing Capabilities for Sustainable Competitive Advantage,’ Journal of Marketing, 69(1), January, 80–94.
BIBLIOGRAPHY
Ghemawat, Pankaj (1986). ‘Sustainable Advantage,’ Harvard Business Review, 64, September–October, 53–58.
Ghemawat, Pankaj (1986). ‘Sustainable Advantage,’ Harvard Business Review, 64, September–October, 53–58.
Aaker, David A. (2005). Strategic Market Management. New York: John Wiley & Sons, Inc.
switching cost see cost