Which of the following best describes sustainable competitive advantage?

Which of the following best describes sustainable competitive advantage?

• A. Advantage that lasts a few months
• B. Short-lived and easily replicable advantage
• C. Long-lasting based on unique resources
• D. Advantage derived solely from price reduction

Answer: (C)

Sustainable competitive advantage is defined as the ability of a company to maintain its competitive edge over its rivals for an extended period. This concept is closely tied to a company’s unique resources, capabilities, or assets that are not easily replicated by competitors. The essence of sustainable competitive advantage lies in its durability and the unique factors that allow a firm to outperform its competition consistently. When a competitive advantage is long-lasting and rooted in unique resources—such as proprietary technology, strong brand reputation, specialized skills, or exclusive access to the best natural resources—it enables a company to differentiate itself in the market. These resources create barriers to entry, making it difficult for new competitors to challenge an established firm effectively. Thus, a sustainable competitive advantage fosters not only longevity but also resilience in competitive positioning. In contrast, advantages that last a few months or are short-lived indicate that they are not sustainable and can be easily eroded by competition. Additionally, relying solely on price reduction does not constitute a sustainable competitive advantage because it can lead to a price war, which erodes profitability and does not necessarily reflect unique value over time.

Sustainable competitive advantage is defined as the ability of a company to maintain its competitive edge over its rivals for an extended period. This concept is closely tied to a company’s unique resources, capabilities, or assets that are not easily replicated by competitors. The essence of sustainable competitive advantage lies in its durability and the unique factors that allow a firm to outperform its competition consistently.

When a competitive advantage is long-lasting and rooted in unique resources—such as proprietary technology, strong brand reputation, specialized skills, or exclusive access to the best natural resources—it enables a company to differentiate itself in the market. These resources create barriers to entry, making it difficult for new competitors to challenge an established firm effectively. Thus, a sustainable competitive advantage fosters not only longevity but also resilience in competitive positioning.

In contrast, advantages that last a few months or are short-lived indicate that they are not sustainable and can be easily eroded by competition. Additionally, relying solely on price reduction does not constitute a sustainable competitive advantage because it can lead to a price war, which erodes profitability and does not necessarily reflect unique value over time.