One of the important conditions that a firm must meet in order to gain a sustainable competitive advantage with its capital is:
A)the firm's overhead costs must be high.
B)the firm's resources must be imperfectly imitable.
C)the firm's production technology should be obsolete.
D)the firm's product prices must be high.
E)the firm's organization must be highly centralized.

Question

Quizplus · Accepted Answer

A sustainable competitive advantage requires resources that are valuable, rare, difficult to imitate, and non-substitutable. Imperfectly imitable resources are those that cannot be easily copied or acquired by competitors, thus giving the firm a sustained advantage. High overhead costs, obsolete technology, high product prices, and highly centralized organization are not necessarily conditions that lead to sustainable competitive advantage.

One of the Important Conditions That a Firm Must Meet