The paper “ Criteria for Deciding the Firm’ s Capabilities for Sustainable Competitive Advantage” is an exciting variant of the literature review on business. Today’ s firms have to manage and operate under a dynamic and complex business environment (Baker and Nelson, 2005). A complex business environment is very hard to predict due to many uncertainties. For organizations to succeed in such an environment, firm s must think strategically. This involves understanding the changing competitive environment, exploiting opportunities, and seeks improvement in every sector of business (Ma, 2003). Organizations must respond very quickly to opportunities and threats.
In order to succeed and improve performance, firms must compete in a way that they outperform their competitors in the business environment. In over to be more competitive organizations should endeavor to satisfy their customers more appropriately and proficient compared to their competitors (Ma, 2003). Generally, an organization must strive to add value in order to succeed. Adding value leads to a competitive advantage. This paper will extensively highlight the four factors that managers can use to decide whether their firm has the capability of sustainable competitive advantages.
These factors include rarity, valuable, non-substitutability, and imitability. The essay also defines resources, capabilities, core competencies, and the concept of sustainable competitive advantage. It is important to note that no advantage can remain in the long run since the competitors will eventually imitate the source of the advantage either a product or service. In addition, technological advancement often shortens the life of competitive advantage (Baker and Nelson, 2005). Sustainable competitive advantage may result from the dynamic interconnectedness between an organization and the external environment. Appropriate identification and development of tangible and intangible resources combined with capabilities have the potential to enable an organization to survive and be a market leader in the long run (Baker and Nelson, 2005).
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