Factors that Influence the Firm Capabilities in Competitive Advantage - Coursework Example

Sustainable Competitive Advantage Author’s Name: University’s Name: Introduction The four factors that influence the firm capabilities in competitive advantage include the use of imperfectly imitable, rare, valuable and non-substitutable resources. First, is the use of imperfectly imitable resources such as intellectual property. A well-developed intellectual property includes patents, trademarks and logos. This provides monopoly, as a developed trademark, can legally prevent competitors from taking advantage of customer good will generated by the business. Also, trademarks and patents increase the monopoly of the firm in the market. As a result, business should have an IP strategy as part of corporate planning strategy (Andersen J 2010). Another criterion is the use non-substitutable resources such as use of people as the main source of competitive advantage. Firms' technologies, goods, structures can be easily copied by competitors those with vast financial resources. However, it proves very complex for other firms to match and copy the highly enthused and caring customers a firm has. Also, use of rare resources where the resources are not controlled by the competing firms, trust is a dynamic that can be employed by managers to gauge the competitiveness of a firm. It should be observed from both individuals and organizations. Lastly, the managers can use the valuable resources to improve proficiencies and efficiency. However, managers should be flexible with technology as resources are presumed to be valuable can be obsolete. For example, by use of the above-mentioned dynamics Coca-Cola has maintained top position since start overcoming competitors like Nestle SA (Hinter hubA, 2013). Body Analysis Core competencies are as a result of a specific set of skills that provide supplementary value to the customer (Carmwell A, 2004). Also, they allow a firm to access various markets, as well as, the development of central products. Again, core competencies allow the business to give attention and efforts on things they do well and utilizing as much as they can for everything else. Utilizing core competencies can boost business by performing a unique thing that the competitors cannot do. However, core competences should be relevant to the fact that there are the activities that influence the consumer on the products produced by a company. At the same time, they should be of difficult to imitate. This will result to the company offering goods that are better than those of the competitors'. Subsequently, it will be difficult for the competitor to catch up on every day the company is working on the competence to improve and sustain the competitive position. Lastly, it should be able to open up potential markets. If the competence only opens up small niche marketplaces, the success in the markets will not be sufficient to sustain noteworthy growth and competition (Carmwell A, 2004). Basically, resources are the materials, dynamism, staff, and knowledge and asserts. They have three main characteristics includes utility, limited availability as well as potential exhaustion. Additionally, they can be used as key competence by utilizing them for innovation and technology. Examples such as non-substitutable and valuable resources can be used to foster innovation in a firm. Non-substitutable can be utilized where wise managers can buy the engineers as well as the suitable programs developed by the engineers in the world best universities. At the same time, the managers can utilize the valuable resources by maintaining IT experts in their company, as well as, funding their projects. This will work as a key competence to the company because its leads to the market expansion where goods can be sold globally. Also, technology allows companies to keep the cost at a minimum where it reduces human dependence to perform necessary production process (Carmwell A, 2004).On the other hand, capabilities refer to the connection of capacity and ability. Also, it can be explained as the knack to achieve definite actions through the set of manageable and measurable faculties and features. It can be used as a core competence by utilizing company capabilities of mass production. Here the companies capabilities are the strengths of the companies .They can be used for market expansion thereby an advantage to the company and competence to sustain competition (Carmwell A, 2004). Essentially, competitive advantage is a business notion describing the features that allow a firm outclasses its competitors. The features include cheap power, highly skilled personnel, new technologies, locations among others. The main purpose of the criteria used by firms is to gauge the position of the firm in the companies that produce similar goods (Sanchez cm &Schmis A S, 2013). Again, they allow generation of more sales as well as retention of customers. The effect of this is monopoly in the market as well as globalization. Meaning after putting in place the criteria, the company advances beyond competitors and monopolize the market. For example, in Japan Toyota had to beat likes of Honda in the mainland so as to be a global competitor. The fact that Toyota has developed the use of fuel –cell in their cars which is cheaper than gasoline is a great leap forward. Again, the fuel-cell developed by Toyota develops much interest to the drivers who are eco-friendly since the fuel –cell is categorized as zero-emission vehicle. Such rare, non-substitutable, valuable and imperfectly imitable resources have resulted in a great leap forward to the company. As a result, even the closest competitor Honda is much behind Toyota due to the features developed (Sanchez cm &Schmis A S, 2013). Strategic management is the formulation and application of the main goals as well as the objectives taken by the managers on behalf of proprietors. This is set considering resources available, internal and external environment which the firm competes. Strategic management gives a wide frame work of organization future rather than the next issue and problem. Again, it always targets the future which would otherwise be stagnant without strategic management. Processes such as analyzing, monitoring as well as assessment involved in the strategic management allows the company to meet its goals and objectives efficaciously. At the same time, the process ensures companies are in line with expectations of the stakeholders. The initial task of the strategic management is compilation and dissemination of the organization's goal, mission and vision. Consequently, the purpose as well as essence of the organization is met. At the same time, it provides the context where the staff makes day to day tasks decisions that are found in the strategic management. The four factors in the competitive advantage have a sublime relevance to the decision making as well as the managerial decisions. For instance, they lead to cost leadership where the management is coerced to develop a unique selling proposition that eradicates the need for competing on the basis of cost leadership. By so doing the company can provoke the huge response from the mass consumers (Y c, 2010). The four resources keep managers on toes by continuous assessment of the product and service strategies. Evaluating the quality perceptions of the goods makes the company aware of its image in the market as well as the market value of the product. Consequently, the managerial team, as well as organization at large, will have to make decisions according to the outcomes of the assessment brought by the four dynamics (Y c, 2010). Conclusions There are four factors that can are used to determine the position of the competition advantage platform. These are imperfectly imitable resources which are the resources that are extremely costly and difficult to duplicate. Also, the non-substitutable resources, this are the resources that no other resource that can replace them and produce similar competition. Besides, there are the rare resources which are the resources that are not organized by any competing company. Lastly, there are the valuable resources which are the resources that give room for the company to develop efficiency and effectiveness. At the same time, Andersen J 2010 postulates that the toughest aspect of business is to maintain the competitive advantage against the competitors (Y c, 2010). The aspect means having alternatives that are unique, exceptional, long-term, significant as well as measurable when compared to the competitors. Such characteristic gives a huge boost to business to realize the competitive advantage. Toyota competition with its counterpart Honda has proved that the four resources are worth incorporating otherwise the companies lose the competing advantage. Toyota and Honda automotive companies compete for market across Asia, and the US. Nonetheless, Toyota has used strategies as well as utilization of the four resources. This has acted positively to the company as it has the leading markets in mainland Japan and the US. References Read More