Competitive Advantage: Attributes for Higher Market Position

This document discusses the concept of competitive advantage and its attributes that allow companies to gain higher market position compared to their competitors. It explores the concepts of distinctive capability and core competence, and how they contribute to a firm's success. The document also delves into the resource-based view and strategies for global efficacy, as well as the importance of learning as an organizational resource.

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Competitive Advantage
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Competitive advantage:
Competitive advantage refers to the attributes of companies which allows them to
compete with their competitors and gain higher market position compared to them. Noe et al.
(2017) define competitive advantage as the attributes which business organisations earn largely
due to the skills and talents of their human resources. They point out that human resources or
employees are responsible for both making and executing decisions using their intellectual
capital. Bernal‐Conesa, de Nieves Nieto and Briones‐Peñalver (2017) opines that technological
advantages like access to modern technology can also attribute companies with advantages of
manufacturing goods at lower costs compared to their competitors which again would attribute
them with technological advantages. Ivanov and Mayorova (2015) point out that top brands of
goods which business organisations manufacture are also capable attributing the firms owning
them higher profits compared to their competitors. Beckers et al. (2017) strengthen the argument
by pointing out that the factors like huge customer bases and shareholders bases attribute the
firm which revenue and capital generation respectively. These attributes like high revenue and
capital generation enable the companies acquire assets like smaller firms either within the same
industry or from a different industry(s). Thus, it finally that the term competitive advantage can
be defined from different perspectives. Finally, it can be pointed out that competitive advantage
refers to attributes like intellectual capital, financial capital, technological capital and customer
bases, any or all of which allow firms possessing these earn higher profits and attain higher
market positions compared to their competitors.
Distinctive capability:
Distinctive capability refers to those special capabilities which attributes firms with
special advantages which its competitors find challenging to achieve. Lévesque et al.(2015)

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define distinctive capabilities as those attributes which companies earn by virtue of their special
position. For example, banks have the distinctive capability of maintaining their own current
accounts. Similarly, companies like Google can use their own cloud in their own businesses. The
other companies are customers to the banking and the IT companies because they cannot
manufacture financial products and cloud respective. They are dependent on banks and IT
companies for these two products. Thus, for a banking company, its distractive capability lies in
its advantage of using its own products to support its services. Similarly, for Google, the
distinctive advantage lies in the fact that the company can use its own cloud products to share
business information.
Core competence:
Core competence refers to combination of attributes that makes a firm more distinct from
its competitors, thus enabling it to generate higher profits compared to the latter. Espinoza and
Ukleja (2016) mention that business organisations have to develop and increase their respective
core competencies to retain their competitive position in the market. For example, the core
competencies of multinational ICT companies like Apple Inc lies in their capability of
manufacturing high-end products like smart phones which dominate the smart phone market
globally. Similarly, the core competencies of multinational consumer goods companies lies in
their power to market products at low costs, yet retain the high quality which smaller companies
cannot ensure. Thus, in short core competencies are the attributes related to the core business
areas of companies which differentiates them from their competitors, thus attributing higher
profits.

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Resource based view and strategies and global efficacy:
Resource based view is a strategic management view which takes into account the
resources available within the disposal of a firm to gain competitive advantage in the global
market. Hitt, Xu and Carnes (2016) define resource based theory or RBT as a theory which
practitioners take into account to study firms would aim to attain competitive advantage in the
market. They assume that firms in the global market would target to attain differentiation from
their competitors. Kull, Mena. and Korschun (2016) support the argument by pointing out that
firms today align their resources to generate higher revenue and capital, both of which combine
to form the financial resources base. The firms today use the raw materials, human resources,
intellectual property rights, technology and knowledge at their disposal to achieve global
efficacy. This global efficacy is generated by the firms, especially the global firms by taking into
account the demands and expectations of the customers while making product strategy. They
channelize the resources to produce goods and services as per the customers’ demands which
earns high revenue. They use their core competencies like technological power and brands under
their possession to differentiate their products from the competitors. Thus, it can be inferred that
firms align resource base theory or RBT to form strategies to gain efficacy or to meet the
demands of the global consumer base to generate high revenue.
Learning as an organizational resource:
I can point out upon reflection that organizational learning as one of the most
strategically important resources. Hitt, Xu and Carnes (2016) can again be reirated over here to
mention that knowledge is a important organizational resources as per the RBT. This role of
knowledge can be exemplified by the fact that firms today while making strategies have to take
into account the factors like customer preferences and supply chain related information. For

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example, in order to form product strategies regarding new product development and to launch
innovative versions of existing products, firms take into account customer feedbacks and
reviews. They consider these feedbacks and reviews as the drivers of their innovations.
Similarly, while making the supply chain management strategies, companies communicate with
suppliers. Similarly, the companies have to gain information about shareholders’ expectations.
Thus, it is evident that learning about expectations of different groups of stakeholders like
customers, suppliers and investors effect different aspects of decision making. For example, the
learning about the customers’ expectations impact the product strategies while learning about the
investors’ impact the financial strategies. Thus, it can strongly be established that learning is a
very important organizational resource.

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