The Dynamic Nature of Competitive Advantage of the Firm

Abstract

Trade through tougher competition expels less efficient forms from the market. As Rita G. McGrath [1] put it forward, in today's business environment the competitive advantage often evaporates in less than a year. While this seems to be devastating, in fact this is an opportunity for new comers. Twenty-five leading companies across various sectors were analyzed in-depth, drawing on more than 100 interviews with managers and knowledge workers. The study found that dynamic comparative advantage is the ultimate source of sustainable competitive advantage and investment into both high productivity and high absorptive capacity is required.