Competitive Advantage: Is It Sustainable or Temporary in Today’s Dynamic Environment?

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Competitive Advantage: Sustainable or Temporary in Today’s Dynamic Environment? Reginald M. Beal School of Business and Industry Florida A&M University Tallahassee, FL 32307 Tel: (850) 561-2339 Fax: (850) 599-3533 E-mail: rbeal@nettally.com Competitive Advantage: Sustainable or Temporary in Today’s Dynamic Environment? Spirited debate in the field of strategic management wages as to whether competitive advantage is sustainable or merely temporary in today’s highly dynamic environments. The objectivity of the debate, however, suffers from a lack of specificity regarding the terms “sustainable” and “temporary.” That is, the amount of time or duration of a sustained or temporary competitive advantage is never specified by a writer. This…show more content…
A sustainable competitive strategy is manifested if a competitive strategy yields above-average financial performance in two or more stages of the industry life cycle. On the other hand, a temporary competitive advantage is evident if a competitive strategy produces above-average financial performance in only one stage of the industry life cycle. Thus, this approach incorporates time as an essential element of sustained and temporary competitive advantage. The Approach’s Origin While conducting a study (Beal & Yasai-Ardekani, 2001) examining the performance of generic and combination competitive strategies implemented by small manufacturing firms competing in the embryonic, growth, maturity, and declining stages of the industry life cycle, my partner and I noticed that the pursuit of some competitive strategies yielded above-average financial performance in more than one stage while other strategies produced such performance in only one stage. Meanwhile, several strategy researchers (Brown & Eisenhardt, 1998; D’Aveni, 1994; Eisenhardt & Martin, 2000; Hamel, 2000) argued that at the firm level achieving and particularly sustaining competitive advantage in today’s highly dynamic (or hypercompetitive) environments was difficult if not impossible. Because advantages are quickly copied (D’Aveni, 1994) or rendered inoperable today by the advent of new advantages (Hamel, 2000) firms can only look forward to temporary or a series of temporary advantages (Brown &

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