Once a competitive advantage is achieved it will be important that it is sustained. Competitive advantage can best be sustained by strategic capabilities which are:
Valued,
Rare, and
Robust
Value of Strategic capabilities:
The strategic capability must be one that is of value to the customer. A distinctive capability is not enough: the strategic capability must be able to generate what customers’ value in terms of products or services.
Rarity of strategic capabilities:
Competitive advantage will not be attained if competitors have identical strategic capabilities. Unique or rare resource or competences are needed to allow the organisation to outperform its rivals.
Robustness of strategic capabilities:
Capabilities for competitive advantage should be robust, meaning that they are hard to imitate. Therefore, competitive advantage is not so often sustained through physical/tangible resources as these can be copied/acquired over time. More important is the way in which the resources are organised and deployed as these competences are, in general, more difficult to identify and imitate.
However, organisations can also take strategic steps to protect their competitive position through:
Price based strategies,
Further differentiation, or
Lock-in
Price based strategies:
An organisation that is pursuing a price-based strategy (such as a no-frills position on the strategy clock) may be able to sustain this position as follows:
– Further cost efficiencies,
– Winning price wars, or
– Accepting lower margins
Differentiation based strategies:
These can be sustained through:
– Creating difficulties in imitation,
– Achieving imperfect mobility of resources, and
– Re-investing margins
Differentiation through innovation:
Innovation is increasingly seen as important for strategic success. The reasons are:
– Increased rate of technical advances
– Increased competition
– Increased customer expectations.