Competitive advantage refers to the inherent ability of a firm to meet the real needs of key customers better than the competition. Two types of competitive advantage exist: transient competitive advantages and sustainable competitive advantages. Transient advantages come from one time improvements in the firm's ability to produce higher-quality, lower-cost, or more innovative products. For example, when a company locates a facility in a low-labor-cost country, it can gain a cost advantage over its competitors. However, as soon as the competitor locates in the same country, or in a lower wage country, the labor cost advantage disappears. Likewise, when a company introduces a new and superior product, it possesses an advantage in the marketplace. Unfortunately, most new products are in the market for much less than one year before the competition comes to the market with a better product (often reverse engineered and improved). A third type of transient advantage emerges when a firm...
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Editor information
Rights and permissions
Copyright information
© 2000 Kluwer Academic Publishers
About this entry
Cite this entry
(2000). SUSTAINABLE COMPETITIVE ADVANTAGE . In: Swamidass, P.M. (eds) Encyclopedia of Production and Manufacturing Management. Springer, Boston, MA . https://doi.org/10.1007/1-4020-0612-8_942
Download citation
DOI: https://doi.org/10.1007/1-4020-0612-8_942
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-7923-8630-8
Online ISBN: 978-1-4020-0612-8
eBook Packages: Springer Book Archive