Internal and external environment or factors influence the success of any company. Even though an organization may not have a significant influence on the external environment, it has full control of internal factors that affect its operations or success. An organization is likely to be successful when it has lot strengths, as well as a competitive advantage and sustainable competitive advantage in the market. Thus, it is essential to understand the differences between strength, competitive advantage, and sustainable competitive advantage.
Strengths, especially in relations to the company, refer to both resources and capabilities that an organization possesses, and they are used to develop and gain a competitive advantage in the market. At the same time, strengths are the tools that organizations are using to counter threats while taking advantage of prevailing opportunities to succeed or enjoy long-term success ( Sukumaran et al., 2015) . Thus, analyzing a company’s strengths is important because it determines what the company is good in that can result in a competitive advantage. The strength of a company, therefore, determines its competitive advantage. Strength is a determinant of competitive advantage. Examples of strengths include strong brands, effective management or leadership, and a positive reputation in the market or the society at large.
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Unlike strength than majorly focuses on the resources and capability of a company, competitive advantage occurs when an organization can provide the same goods or services as rivals in the market but at a lower cost. Alternatively, a company can enjoy a competitive advantage when its products or services are more beneficial to customers than those of competitors in the market ( Hosseini, Soltani & Mehdizadeh, 2018) . A competitive advantage is caused by either cost advantage a differentiation advantage. However, to enjoy a competitive advantage, an organization should possess resources and capabilities that are better than those of competitors to reduce the cost or offer high-quality products and services. Also, a company is said to enjoy a competitive advantage when it enjoys higher profit rates than average rate of profitability in the industry ( Majeed, 2011) . For instance, McDonald’s has gained a competitive advantage in the USA fast food retail sector, as it accounts for the largest market share. McDonald’s is taking advantage of its resource and capabilities to offer high-quality and convenient products and services in the US market.
Although competitive advantage may be short-term, sustainable competitive advantage refers to a special position in the market that a company creates in relations to its rivals, which allows it to outperform them and enjoy long-term success consistently. A company is only able to gain a sustainable competitive advantage when it can create value for its products and services, as well as processes ( Guimarães et al., 2017) . Besides, to acquire a sustainable competitive advantage, a company must have unique, valuable, and inimitable resources and capabilities. Also, a company that can maintain high profits for many years is said to have a sustainable competitive advantage ( Hosseini, Soltani & Mehdizadeh, 2018) . For instance, Microsoft is one of the companies with a sustainable competitive advantage in the telecommunication sector. Thus, competitive advantage is short-term while the sustainable competitive advantage is long-term. In conclusion, the concept of strengths, competitive advantage, and sustainable competitive are different, even though they are all beneficial to companies. A firm that effectively uses its resources and capabilities is likely to attain both short-term and long-term success. Competitive advantage and sustainable competitive advantage, therefore, are influenced by a company’s strengths. Companies should strive to create short-term and long-term success.
References
Guimarães, J. C. F. D., Severo, E. A., & Vasconcelos, C. R. M. D. (2017). Sustainable competitive advantage: a survey of companies in Southern Brazil. BBR. Brazilian Business Review , 14 (3), 352-367.
Hosseini, A., Soltani, S., & Mehdizadeh, M. (2018). Competitive advantage and its impact on new product development strategy (Case study: Toos Nirro technical firm). Journal of Open Innovation: Technology, Market, and Complexity , 4 (2).
Majeed, S. (2011). The impact of competitive advantage on organizational performance. European Journal of Business and Management , 3 (4), 191-196.
Sukumaran, A. K. S., Sivasundaram, S. C., Anushan, R. A., & Thiyagarajan, S. (2015). Research Article Diagnosing SWOT through Importance-performance Analysis. Research Journal of Applied Sciences, Engineering, and Technology , 9 (9), 792-796.
