Sustainable competitive advantage exists when a firm Blank______.
Multiple choice question.
starts up and competes for existing market share in the industry
formulates and implements strategy
maintains superior performance relative to its industry over a long period of time
is self-regulated and self-motivated
The correct answer and explanation is :
Correct Answer:
✅ Maintains superior performance relative to its industry over a long period of time
Explanation:
A sustainable competitive advantage exists when a firm consistently outperforms its competitors over a long period. It means the company possesses unique resources, capabilities, or strategies that competitors find difficult to imitate or substitute.
To achieve and sustain a competitive advantage, a firm must develop valuable, rare, inimitable, and non-substitutable (VRIN) resources. These factors help the company maintain superior financial performance, market leadership, and brand loyalty.
Key Elements of Sustainable Competitive Advantage:
- Uniqueness – A company must differentiate itself through innovation, superior products, or exclusive services.
- Cost Leadership – Offering products or services at lower costs while maintaining quality gives firms an edge.
- Customer Loyalty & Brand Strength – Strong brand recognition and customer trust create barriers for competitors.
- Operational Excellence – Efficient supply chains, technology adoption, and optimized processes improve long-term performance.
- Intellectual Property & Innovation – Patents, trademarks, and research & development (R&D) prevent imitation by competitors.
Examples:
- Apple Inc. maintains a sustainable competitive advantage through innovation, brand loyalty, and a strong ecosystem of hardware and software.
- Amazon dominates e-commerce with its vast logistics network, low costs, and Prime membership benefits.
- Coca-Cola retains market leadership due to its global brand recognition and secret formula.
A firm that merely competes for existing market share, formulates strategies, or is self-motivated does not necessarily achieve a sustainable advantage unless it maintains superior performance consistently over time.