Sustainable Competitive Advantage in Business

This report analyses the strategies of achieving and sustaining the competitive advantage in today’s competitive business world. It looks at the various measures and strategies that the companies can adopt in order to ensure a competitive edge ahead of their rivals.


In the business world today every business is faced with competition from the competitors or rivals within the market. Acquiring the competitive advantage over your rivals and being able to sustain it calls for various static strategies. “Competitive advantage in this case refers to the ability of a company to be able to perform better than its competitors by taking advantage of some benefits such as technology, supply side and demand side advantages among other factors,” (Comanor, p35).

The company must also be able to sustain the competitive edge through various ways such investing in research and development and ensuring continued innovation. It is very crucial for the business to understand its market, its products and come up with various strategies that will ensure that its products remain the leader in the market by being able to win and sustain customer confidence in their products. Managing to build competitive advantage over the rivals and being able to sustain it helps the company to build on its image and this ensures that the company is able to maintain success in the market and increase on its profit margins.

Background Section

Achieving competitive advantage


“One of the most effective ways of achieving competitive advantage in the market is by ensuring that the company has invested in modern technology,” (Jay, p49). By using efficient technology to produce goods, it ensures that the company is able to produce goods efficiently and maintain the quality that is demanded in the market. This eventually leads to flexibility in the market of the company’s goods.

Flexibility in the market ensures that the goods can move very fast within the market. Use of high technology normally requires very high capital for the companies and some may not be able to solely afford the resources required to update their technology. This calls for special measures where companies can achieve competitive advantage by pooling resources together and investing in group technologies.

Group technologies ensure that companies can be able to invest and ensure updated technology even without all the required resources since they will share the cost. It also ensures that companies spread their risks such that a change in technology does not affect the company in large margins. Investment in technology ensures that the company will be able to reduce the cost of production and produce goods that are of the required quality in the market.

The ability to achieve low cost of production by the companies ensures that the products can be passed to the consumers at a low cost and thus if price is a factor in the market, the company will be at an advantage. Investment in technology includes investing in modern machinery for example production machines that are able to produce high capacity within a short time, computerized financial systems, information technology among other types of technologies in the market.

Demand and supply side factors

Competitive advantage in the company cannot be achieved without addressing the supply side and the demand side factors of the company. “Within any company, the final goal is the customer satisfaction and therefore all the factors to achieve the competitive advantage must be directed towards customer satisfaction,” (Achrol, p83). This means that every aspect that touches on the product must be customer oriented in order to be able to influence the customer’s choice of purchasing. In the demand side factors, the company must ensure that its products are well differentiated from the rival’s products.

This will require the company to address factors such as packaging, sizes of the product, color of the product and most important the quality of the product. The way the company presents its products to the customers will be the first determining factor whether the products are appealing to the customers or not. “Differentiation also helps the customers to easy distinguish and identify the products of the company,” (Michael, p66).

Another demand side factor is the distribution of the product to the customers. If the company is able to deliver the products nearer to the customer, it will be able to have a competitive advantage by saving the customer the time to look for the product. Good distribution mechanisms ensure that the customers can be able to reach the product at a very low cost. It also makes the product more readily available than the rival’s products.

The company must ensure that distribution of products is prompt to avoid instances of shortages that may inconvenience the customers. Large production capacity for the company will ensure that distribution of the product to the customers is always sufficient. Companies that want to achieve competitive advantage must ensure that the customers are aware of the availability of their products in the market. This includes using communication measures such as advertising and promotions to create awareness of the product to the customers. Such advertising should be strategic in such a way that it is customer oriented.

For example the company should use the consumers of the product who don’t have any profitable interest in the company to advertise the product. Such advertising strategies are more convincing since they create confidence to other customers who have not tried the product. Another example is ensuring that the adverts take advantage and highlight any unique and special benefits in the product which may not be present in other products. “Effective adverting and promotions will ensure that the customers are aware of the availability of the product in the market and where they can get it,” (Jaynie, p24).

They also convince and influence the customer’s choices when purchasing. Companies must also be very careful on the timing of release of new products into the market. For example a company should take advantage of seasons such as festive seasons to advertise and promote products since this are well known shopping seasons. “Companies that are able to achieve competitive advantage must also maintain customer loyalty by ensuring that the relationships between the company and the customers are prompt. This may be inform of discounts, customer newsletters and other schemes designed for customer loyalty,” (Jay, p53).

Supply side factors are eventually translated into the demand factors. Companies must take advantage of the supply side factors in order to ensure competitive benefits that can be passed to the customers and thus ensuring competitive advantage. “A company that is able to achieve low cost of production by managing the supply side factors will in itself have achieved a competitive benefit over its rival,” (Comanor, p44).

This includes ability to get access to the natural resources, having good relation-ships with the suppliers and being able to acquire quality raw materials at a cheaper cost from the suppliers. This enables the company to lower cost of production and thus sell products at a lower cost to the customers as compared to its rivals.

Section B

Sustaining competitive advantages

Innovative systems and strategies

Companies that want to sustain their competitive advantage must have very innovative strategies in place. One of the most effective systems is ensuring that the company has invested in a qualified workforce that is able to meet the customer demands. The human resource that is maintained by the company must be very intelligent to always ensure efficient mechanisms in place at all times. The company must invest in training the work force on dealing with the customers. The most sensitive of all is when dealing with the customer service of a company. “A company can have very quality products but if the customer service is poor the customers will be turned away,” (Jaynie, p28).

In this case, companies must train the customer service attendants to always consider the customers as a priority in the company. This includes simple activities such as addressing the customer’s queries, time for attending to customers, receiving phone calls, being courteous and welcoming to customers among other factors.

Good customer service wins many customers towards the company. In other sectors of the company, the human resources must ensure that it has very efficient work teams that offer professional services towards ensuring quality products for the customer’s right from manufacturing of the products, packaging and also distribution of the products. “Other strategies that the company should ensure are developing and investing in own competitive advantage that cannot be imitated by its rivals,” (Jay, p60).

This ensures that the strategies that are used by the company are pioneer in the market and thus the company will always act as the leader in the market. Launching of the new products should always be in a manner to own the lead in the market which easily wins the customers to the product. Other strategies include ensuring barriers to entry where possible and this ensures that companies always have the advantage of owning a certain brand of a product.

Research and development

“A company cannot be able to sustain competitive advantage in the market without investing in research and development within the company,” (Michael, p77). Research about the market helps the company to be updated on the market requirements such as customer demands. The company can also be updated on the new technologies and strategies that are used by the rival companies. Through research and development, the company is able to know the underlying challenges in the market and evaluate ways of how to address them. This includes challenges such as threats that may be posed by the competitors on the competitive advantage of the company.

Research and development also helps the company to analyse the economics in the market such as the cost analyses and also value analyses. This ensures that the company has invested in continued efficiency into the future of the company. It is also very easy for a company to predict the future challenges that are likely to occur in the market in future and prepare in advance how to face them. For example possible economic fluctuations such as recessions, inflation and other economic factors that may affect the company products. Through research a company is able to discover new markets, new product development strategies, and cheaper technologies among other competitive advantages.


  • Companies that want to achieve competitive advantage must invest in new technologies to ensure economies of scale through reduced cost of production which ensures competitive advantage to the customers through reduced prices
  • Companies must always consider the customer’s needs as the first priority in the company to be able to win their confidence in their products. This includes product differentiation, quality of the product, ensuring effective communication such as advertising and promotions, good customer care among others.
  • Companies must invest in very qualified workforce which is sensitive on the customers needs and which is innovative enough to always ensure new ideas and experimentation of new products and strategies win the market
  • Companies must always ensure a gap between them and their competitors to ensure competitive advantage. This can be done by always owning the competitive advantage strategies and defending them against imitation in the market.


  1. Achrol, Ravi S. Evolution of the Marketing Organization. Sage publications, 2003, p77-93.
  2. Andrew S.C. Competitive Advantage: Assessing Competitive Superiority. McGraw Hill Publishers, 2005, p24-56.
  3. Comanor W and T. Wilson. Advertising and Market Power. Harvard University Press, 2007, p33-48.
  4. Jay Barney. Gaining and Sustaining Competitive Advantage. Wesley Publishing Company, 2001, p44-66.
  5. Jaynie L. Smith. Creating Competitive Advantage: Give Customers a Reason to Choose You over Your Competitors. Prentice Hall Publishers, 2004, p14-32.
  6. Michael E. Porter. Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, 1998, p55-82.
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