The ultimate purpose of strategic management is to secure competitive advantage of the organization in question. Therefore it seems natural to take a look at both the concept of competitive advantage and the idea of sustainable competitive advantage. Recent development in the thinking related to those concepts has been part of what shaped competence-based strategy as we know it today. Thus, the discussion of competitive advantage acts as a prelude to a discussion of the theoretical areas that shaped competence-based strategy.
The development over time of the concept of (sustainable) competitive advantage is one of the main reasons why the concept of strategic management has evolved into its recent state. In this section I make three attempts to define competitiveness before discussing sustainable competitive advantage.
According to Michael Porter, competitiveness is what the customer is willing to pay for. Thus, a first attempt to define competitiveness could be to look at value to the customer derived from the products and services of the firm. Some would say that this is fairly easy to answer as a firm offers (physical) product to its customers. But is it really so simple? James Brian Quinn, in his 1992 book, makes a great effort to convince us that it is not. For instance, he cites Ted Levitt’s famous