Sustainable Competitive Advantage in an Increasingly Competitive Environment - Essay Example

Sustainable Competitive Advantage in an Increasingly Competitive Environment: Case Study of Ecowash Limited In a brief introduction and background of the report, it demonstrates how companies can create sustainable advantages by developing new business ideas. The report is based on Ecowash, which is a waterless car washing company with franchises in Australia and other parts of the world. The company’s main concern is to minimize water consumption and ensure sustainability of water supplies by eliminating the need to wash cars with water. Ecowash Mobile uses a specially designed chemical to lift dirt from car bodies. Unlike the traditional car washing process which is water dependant, Ecowash Mobile’s technique ensures that the paintwork on the car’s body is not tampered with and this in turn leaves behind a clean, polished and protected surface. Ecowash advocates for protection of water resources for the long-term benefit of humanity. The company has adopted energy saving and sustainable techniques in its business processes including using biodegradable products. Against the backdrop of environmental sustainability, the company hopes to project its business operations as an environmental conscious initiative that will help people save not only water resources but also time and energy. This section gives a summary and a critical analysis of various journal articles used within the essay. The first article is “A Contingency View of Porter’s “Generic Strategies” (Jeffrey 2005) the author has highlighted the various sources of competitive advantages in today’s world of business. The author has developed a framework which suggests that organizations obtain sustainable competitive advantages by exploiting their internal strengths and by developing strategies for responding to environmental opportunities while neutralizing external threats and internal weaknesses. This journal article offers valuable insights with a clear reflection on Ecowash Mobile’s business. An important lesson from this article is that Ecowash Mobile can attain competitive advantages in the industry if it can maintain the uniqueness of its innovative business ideas. The journal article The Ultimate Competitive Advantage of Continuing Business Model Innovation (Mitchell & Coles 2003) defines sustainable business practices as the major growth and success opportunity for businesses in the 21st century. In a series of critical arguments, the article seeks to engage today’s business managers and leaders in understanding an emerging view of sustainability as the driver of strategic competitive advantages. The paper has provided an in-depth research and investigation to strengthen its position on the importance of sustainability. The paper has also advocated for such new competencies as zero waste, collaborative growth, climate resilience and renewable resources as the kingpins of sustainability. In fact, these competencies are the same ones implemented by Ecowash Limited. By drawing upon evidences of case studies of various firms that have converted resource constraints into drivers of organizational sustainability, the article Firm Resources and Competitive Advantages by Barney (2001) seeks to provide a vivid definition of the modern pillars of sustainable competitive advantages. The article calls upon businesses to transform the restrictive impact of resource scarcity into sustainable business opportunities. The paper has also made recommendation for organizations to develop new competencies unique to each firm’s business operations. The argument in this article is related to Ecowash Limited in that the company capitalized on resource scarcity to develop a sustainable business solution. The article Differentiation versus low cost or differentiation and low cost (Hill 2001) argues that a confluence of internal capabilities, environmental trends and social factors have naturally forced organizations to adapt new business strategies for gaining competitive advantages. The paper argues that the best strategy for adapting to changes in the internal and external business environments is to build sustainable competitive advantages based on short term and long term advantages. Just like Ecowash has pioneered in the use of less energy resources, the article has examined the role of immobilizing firm resources in creating sustainable competitive advantages. In the article, Creating a Sustainable Competitive Advantage by Anderson and Birrer (2011) an organization is said to have competitive advantages when it develops a long term value creating strategy that has not been implemented by competitors. The article states that when the competitive advantages of a strategy are realized quickly and cannot be duplicated as in the case of Ecowash, then the strategy is sustainable over the long term. The article has also stated that an organization’s leadership and stakeholders should be engaged in defining the purpose and outcomes of sustainable competitive advantages through coordinated communication. The article, Why Is the Trivial Important, Brown and Gregory (2000) has explored how organizations can realize sustainable competitive advantages by developing focused leaders. The article has articulated that by embracing high quality leadership at all levels of organizational hierarchy, organizations can support and encourage the development of their people resources, which is a direct source of sustainable competitive advantages. Indeed, it was through the visionary leadership of Cornish and Nicholls that the idea of Ecowash waterless car washing system was born. In today’s business world, successful leadership development is necessary for meaningful and strong links to business strategies and outcomes. The article, Producing Sustainable Competitive Advantage through the Effective Management of People, Jeffrey (2005) has articulated on ways of achieving sustainable competitive advantages through effective people management. The article has stated that the process of achieving sustainable competitive advantages through people involves making fundamental changes to the way in which people think about the workforce and the employment relationships. It involves achieving success by working closely with people and not limiting the scope of their activities. By working closely with franchises, Ecowash considers its workforce to be a source of strategic advantage and not juts a cost to be avoided or minimised. In the article, Examining Sustainable Competitive Advantage in Intercollegiate Athletics, Smart and Wolfe (2000) the authors have explored the evolution of the concept of sustainable competitive advantages. The article describes results of a research study to understand the practices and strategies used by firms that achieve greater competitive advantages in their business operations. The article has effectively established sustainability as the latest dimension of organizational success by which competitiveness is gauged. This concept has significant implications in the areas of long term growth and success as it introduces new sets of managerial tradeoffs which must be continually addressed. Although Ecowash is an entirely new type of business process, its business strategy is based on the core principle of sustainability and environmental responsiveness. Sustainable Competitive Advantage in an Increasingly Competitive Environment is of great importance in any business environment. This section will critically analyze Ecowash’s Sustainable Competitive Strategy. Ecowash’s waterless car washing system is based on the idea that one of the key drivers of long term success and growth is to have a sound source of competitive advantages. Essentially, every business must have a source of competitive advantages or else it can be outdone by its competitors (Murray 2003). The rapid successful experience of Ecowash shows that there are specific ways and strategies for gaining sustainable competitive advantages. One of these strategies is ownership of capital equipment and access to intellectual property rights. For the case of Ecowash, the company has retained all intellectual property rights and production technologies. Although the company has entered into strategic franchises with companies in other countries, it retained all intellectual property rights. This has made it difficulty for the company’s business to be duplicated by competitors. Having solid research and development capabilities is critical to realization of sustainable strategic competencies. Research and development programs should be supported by a corresponding innovative culture where both employees and the management work collaboratively in defining continuous quality improvement targets. It is the case that companies with strong research and development programs (such as Ecowash) easily become market leaders in their industries. It is imperative for organizations to develop strategies for responding to contemporary social and environmental issues as a way of obtaining competitive advantage (Barney 2001). For instance, Ecowash developed an innovative business that could help its customer save on water and time resources spent in washing cars. According to Hill (2001), holding exclusive distribution rights is an important source of sustainable competitive advantages. When a firm holds exclusive distribution rights for products within a given territory, the product can only be sourced from the firm. This ensures low distribution costs, simple supply chain management system and accountability for product quality and delivery. Having strong barriers to entry can also help companies gain sustainable competitive advantages in their industries. Currently Ecowash enjoys some kind of monopoly in the industry because it initiated an entirely new business idea. In conclusion, the successful story of Ecowash has shown that sustainable competitive advantages can be realized by developing and implementing new innovative business ideas. Such ideas should be supported by focused organizational leadership and strong research and development programs. Although Ecowash is only a few years old (less than a decade) the company has successful made a debut into the international market and its prospects are expected to record considerable growth in the future. A secret to Ecowash’s successful competitive advantage is that the company developed a platform for sustainability based on responsiveness to environmental issues. This was through its efforts in developing a product that helps customer minimize water usage and energy consumption. Reference List Anderson, K & Birrer, G 2011, “Creating a sustainable competitive advantage: A resource-based analysis of the Gonzagam University men’s basketball program,” Journal of Sport Administration & Supervision, vol.3, no.1, pp.10-21, (online EBSCOhost). Barney J 2001, “Firm Resources and Competitive Advantages,” Journal of management, vol.17, no.1, pp.99-120, (online EBSCOhost). Brown, L & Gregory S 2000, “Why Is the Trivial Important? A reasons-Based Account for the Effects of Trivial Attributes on Choice,” Journal of Consumer Research, pp.372-85, (online EBSCOhost). Hill, C 2001, “Differentiation versus low cost or differentiation and low cost,” Academy of Management Review, vol.13, no.4, pp.401-412, (online proQuest). Jeffrey, P 2005, “Producing sustainable competitive advantage through the effective management of people,” Academy of Management Executive, vol.19, no.4, (online EBSCOhost). Mitchell, D & Coles, C 2003, “The ultimate competitive advantage of continuing business model innovation,” Journal of Business Strategy, vol.24, no.5, pp.15-19, (online EBSCOhost). Murray, A 2003, A contingency view of Porter’s “Generic Strategies,” Academy of Management Review, vol.10, no.3, pp.192-205, (online proQuest). Smart, D & Wolfe, R 2000, “Examining sustainable competitive advantage in intercollegiate athletics: A resource-based view,” Journal of Sport Management, vol.14, no.6, pp.133-153, (online EBSCOhost). Read More