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INTRODUCTION
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. A search for usage of the phrase easily turns up numerous titles of articles and books, a number of which predate the widely successful usage of the phrase by Michael Porter in his book Competitive Advantage (1985). Since the appearance of the Porter book, the phrase has spread throughout management, marketing, economic, and human resource publications and served as a component of the titles of many "how to do it" books (e.g., Tweed, 1990) directed at a variety of business activities. Yet, in spite of the vast acceptance of this phrase, there are few attempts to clearly state what competitive advantage actually is, and this appears to be regardless of whether its use is in research or practitioner-oriented publications.
Prior to Porter's use of the competitive advantage terminology in 1985, typical references to competitive advantage used the term without explicit definition. For example, Spence (1984) and Caves (1984) both use the terminology in the titles of their articles but leave the definition of the terminology unaddressed. There is, however, an awareness in their articles of the relative competitive positions of firms within industries. Their perspectives are also heavily reliant upon the viewpoint that asserts that an industry's structure is the determinant of the firms' performances within the industry. Consequently, Caves focuses on the commitment of resources to establish entry barriers that would enhance the performance of a firm, and Spence focuses on the use of subsidies and restrictions by governments to give their domestic firms protection from foreign competitors. Apparently, competitive advantages in this sort of definitional framework are linked to the inhibition of competition or the absence of competitors.
One marketing text by Day (1984) discusses how to determine the value of a competitive advantage in the market by relating it to benefits which must be perceived by a customer group that is willing to pay for those benefits and cannot easily obtain those benefits elsewhere. The text also refers to the sources for advantages in the market as superior skills...