Is Competitive Advantage Really sustainable

Essay by RichmondUniversity, Master'sA-, July 2004

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Assignment 1 -

Several Scholars argue that the sustainability of competitive advantage is really a myth in this highly chaotic environment. To sustain competitive advantage a firm's structure, systems, and resources need to be continuously adaptive to the changing external environment.

Using real life examples and critically evaluating various competitive advantage theories how can companies develop and sustain competitive advantage in this turbulent environment. Use real life examples to support your arguments.

Noteworthy quotations in context of assignment:

"Profitability is a necessary condition for existence and a means to more important ends, but it is not the end in itself for many visionary companies. Profit is like oxygen, food, water, and blood for the body; they are not the point of life, but without them, there is no life"

(James C. Collins, Built To Last, 1994)

"The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage"

(Warren Buffett, 1999)

"Competitive advantage is to be found in management's ability to consolidate technology and production skills into competencies, which empower the business to adapt quickly to changing opportunities"

(Prahalad and Hamel 1990)

"Profit is the only true sustainable competitive advantage, as without profit there is no business to sustain"

(Porter 1985)


To assess whether competitive advantage is sustainable in today's business environments, I believe we must first frame a definition with which to base our analysis.

Michael Porter has described competitive advantage as "a profitable and sustainable position against the forces that determine industry competition". In simple terms, it is gaining an advantage over competitors by offering consumers greater value, either by lower prices or by providing greater benefits and service...