Even when a particular source of cost advantage is rare, it must be costly to imitate in order to be a source of sustained competitive advantage.

Question

Quizplus · Accepted Answer

This statement is in line with the resource-based view of a firm, which emphasizes the importance of rare and difficult-to-imitate resources, capabilities, and competencies in achieving sustained competitive advantage. If a particular source of cost advantage is easily imitated, competitors can quickly replicate the advantage, eroding the firm's profitability. Therefore, for a source of cost advantage to be a sustainable competitive advantage, it must be costly to imitate or replace.

Even When a Particular Source of Cost Advantage Is Rare