Sustainable Competitive Capabilities

If you do not have a competitive advantage, do not compete!!!

A sustained competitive advantage is only achieved when then competitors can not duplicate the benefits of the organizations’ strategy, or when they lack the resources to attempt imitation. The organizations may earn a competitive advantage by using capabilities that are valuable, rare, and they think that these are inimitable. In fact, these such as good, service, and process can be imitated by the competitors. In this instance, sustainable competitive capabilities are required to be considered of and these include (Hitt et al, 2007, pp. 85-87):

A. Valuable capability: It is the capability that allows the organization to exploit the opportunities or utilized threats in its external environment. By effectively using the capabilities to exploit the opportunities, the organizations create values for the customers. As Welch emphasizes, human capital is important in creating values for customers.

B. Rare capability: It is the capability that few competitors possess. Capabilities possessed by many rivals are unlikely to be sources of competitive advantage for any one of them. Resources and capabilities are sources of competitive parity. Competitive advantage results only when firms develop and exploit valuable capabilities that differ from those shared with competitors.

C. Costly-to-imitate capability: It is the capability that offers the other organizations can not easily develop. Capability that is costly to imitate is created because of combination of three reasons (1) organizational culture, (2) casually ambiguous, and (3) social complexity.

D. Non-substitutable capability: It is the capability that does not have strategic equivalents. This final criterion for a capability to be a source of competitive advantage is that there must be no strategically equivalent valuable resources that are themselves are either not rare or imitable.        

Sam Aun (Andy)