Management Essay

8637 Words Mar 16th, 2013 35 Pages

By: Ma, Hao; Business Horizons, Jan/Feb2000, Vol. 43 Issue 1, p53, 12p, 1 diagram

Competitive advantage is considered the basis for superior company performance. To perform at such a level consistently, a firm often has to nurture an evolving system of competitive advantages to carry it through competition and over time. What are the various possible types of such advantages? How can a firm systematically analyze the multiple advantages it could possess and use them to achieve and maintain superior performance? Building on research in strategic management, answers to these questions and others can contribute to managers' knowledge about the nature and content of competitive advantage.
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Positional and kinetic advantages often reinforce each other. On the one hand, positional advantages often spawn kinetic advantages. On the other hand, kinetic advantages can lead to and strengthen a firm's positional advantages. In this sense, the latter could be interpreted as fossilized kinetic advantages, because the current position may reflect a firm's capabilities in a prior period of time. However, lacking kinetic advantages, a firm's future positional advantages will likely be at peril. By the same token, without positional advantages, a firm's kinetic advantages would be unlikely to fully reach their potential.
With high-speed changes in the current business environment, including globalization and advances in information technology, many positional advantages traditionally banked on by leading firms become less durable or irrelevant. Encyclopedia Britannica's positional advantage in its huge sales force was largely rendered obsolete by the availability of online references and CDROM technology as a substitute for its hard volumes. Similarly, in hypercompetitive industries such as personal computers, where, as Intel's Andrew Grove (1996) puts it, "only the

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