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An advantage that is sustainable is one that can be created and exploited over time. For a market-based competitive advantage to be sustainable, it must exist across the life-cycle of the firm. Management must recognise this dual aspect of a competitive advantage – that it is relative to a firm’s life-cycle (i.e. its entry into the market, its market position and its life.) [4]Numerous factors contribute to the emergence and persistence of a sustainable competitive advantage. These include the concentration of key resources, the element of competition tolerance and incumbency. Firms must keep up to date with ‘notable’ competitors or be able to compete on a more favourable basis than current competitors. Especially, in diversified companies high levels of market concentration may represent a challenge. As we will see later in our study, Nohria (2003) argues that the concentration of resources also reduces the probability that select few firms will be able to maintain a sustainable competitive advantage for very long. Value propositions matter because it is by defining them that a competitive advantage can be obtained. The advantage comes from the unique sales proposition that the firm offers to its customers. These propositions are two-way; customers are responding to them by buying the firm’s product, and the firm is responding to that demand by offering the kind of product that it promises. For some firms, such propositions represent only a small proportion of what it does. For other firms, however, such propositions represent a significant part of their value offerings to customers.
When a firm's management suggests that it can pursue a strategic option that can potentially deliver a sustainable competitive advantage, it is up to the business unit or a central authority of the firm, such as its chief executive or top management, to decide whether the proposal is viable. It is important for managers in charge of the process of pursuing a sustainable competitive advantage to consider each rival, as well as the respective market and the dynamics or changes that take place in it over time. It may be prudent for a firm to begin by assessing its rivals in order to be more successful in anticipating unforeseeable changes. Strategies for maintaining or retreating from a market position may change as competitive pressures change over time. The firm's management team should anticipate this change, and consider all options for maintaining or regaining a position in the market. d2c66b5586
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