Academic journal article Journal of Positive Management

The Concept of Competitive Advantages. Logic, Sources and Durability

Academic journal article Journal of Positive Management

The Concept of Competitive Advantages. Logic, Sources and Durability

Article excerpt

1.Introduction

An article touching upon the essence of competitive advantages should start from Flint's words, who states that the terminology used in the field of strategic management that might possibly garner the prize for the most overworked and least understood catch-phrase is "competitive advantage". The extension of that phrase into "sustainable competitive advantage" is currently an elaboration of ambiguity (Flint, 2000). Similarly, Porter notices that the phrases competitive advantage and sustainable advantage have become commonplace (Porter, 1998). A business strategy has become a synonym of searching for competitive advantages, whereas the very concept of competitive advantages is surprisingly confused (Klein, 2002).

A basic task of strategic management is to build and maintain competitive advantages of an enterprise, which should make it possible to achieve aboveaverage results of its business activities (Cegliński, 2016a). If this is the case, development of competitive advantage is equal to achievement of success by a given organization. Despite the ongoing discussions, the concept of competitive advantage is generally accepted in management sciences. It has an unchallengeable significance for the theory and practice of strategic management.

Within the contemporary meaning, the term of competitive advantage was coined by Porter in 1985 (Porter, 1985). He made no reference to previous publications (Klein, 2002). Despite elapse of years and considerable quantity of scientific works in the field of strategic management, it is, at the least, problematic to define the term of "competitive advantage". However, there is no purpose and it is not often found in literature. It would be much more reasonable to understand theoretical grounds, on which the concept of competitive advantages is based. Specification of the considered term narrows the area of analysis, which is not desired in strategic management.

Competitive advantage is obtained when an organisation develops or acquires a set of attributes (or execution actions) that allow it to outperform its competitors (Wang, 2014). In other words, competitive advantage is revealed, when activities of a given organization are more profitable than those of its market competitors or when it outperforms them as regards other significant results of activities (Huff et al., 2009), including, for example, the share in the market, product quality or technological advancement. Inherently, a lot of enterprises are not able to exceed such prescribed standards (Huff et al., 2009). This constitutes ascribing features of uniqueness and exceptionality to competitive advantages. Therefore, they can be treated as a sine qua non for achievement of success, i.e. realisation of strategic targets set (Haffer, 2003). A generally adopted approach to the issue is well conveyed in Grant's simple statement - if the firm is to prosper within the industry it must establish a competitive advantage over its rivals (Grant, 2010). In the contemporary hypercompetitive and quickly evolving complex business environment it is more and more difficult to achieve this.

2.Relation between competitive advantage and firm's performance

As Powell notices, the hypothesis of competitive advantage dominates theories of sustained superior performance. Under any leading strategy theory, sustained superior performance exists, it has specifiable causes, and these causes are tied to the concept of competitive advantage (Powell, 2001). Theoretically speaking, it is possible to deliberate on results obtained by enterprises without using the structure of competitive advantages. For example, one can admit that each case of development of above-average results by enterprises has an individual character and cannot be generalised. However, the value of such assumptions can be doubtful. So far no one has suggested a concept, which could replace the concept of competitive advantages efficiently.

As already mentioned, the term of competitive advantage is commonly accepted in the world's science. …

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