CHAPTER 8
Question Define the term sustainable competitive advantage (5)
Definition of a sustainable competitive advantage
To be competitive, survive and grow in the market, the organization must have competitive advantages
over its rivals. This advantage must be sustainable over a certain period. A sustainable competitive
advantage can be defined as “the ability to deliver superior value to the market for a protracted period
of time”.
Question Distinguish between the following terms competitive advantage and core competency and
key success factor (8)
The difference between a sustainable competitive advantage (SCA), core competency and a key
success factor (KSF)
According to Kotler, a core competency has three distinctive characteristics, namely that it is a source of
competitive advantage, it has a wide variety of applications, and it is difficult for competitors to imitate.
- Therefore there is no key distinction between a core competency and a competitive advantage.
- Kotler distinguishes between a sustainable competitive advantage (SCA) and key success factors
(KSF).
- The difference between the two is that a KSF consists of competitive skills or assets that are needed
to compete successfully in the market (e.g. large food retail needs the right location, enough store
space, ample parking etc). SCA are necessary in order to outperform the competition e.g. economies
of scale which provide the organizations with unbeatable cost advantage.
Question Define the term sustainable competitive advantage (5)
Definition of a sustainable competitive advantage
To be competitive, survive and grow in the market, the organization must have competitive advantages
over its rivals. This advantage must be sustainable over a certain period. A sustainable competitive
advantage can be defined as “the ability to deliver superior value to the market for a protracted period
of time”.
Question Distinguish between the following terms competitive advantage and core competency and
key success factor (8)
The difference between a sustainable competitive advantage (SCA), core competency and a key
success factor (KSF)
According to Kotler, a core competency has three distinctive characteristics, namely that it is a source of
competitive advantage, it has a wide variety of applications, and it is difficult for competitors to imitate.
- Therefore there is no key distinction between a core competency and a competitive advantage.
- Kotler distinguishes between a sustainable competitive advantage (SCA) and key success factors
(KSF).
- The difference between the two is that a KSF consists of competitive skills or assets that are needed
to compete successfully in the market (e.g. large food retail needs the right location, enough store
space, ample parking etc). SCA are necessary in order to outperform the competition e.g. economies
of scale which provide the organizations with unbeatable cost advantage.
