The competitive power of a company resource or competitive capability hinges on
A)how easy it is for the firm to copy or imitate its rivals' moves in the marketplace.
B)whether it is robust and,therefore,something rivals cannot afford to develop.
C)whether it leads to competitive volatility,forcing rivals to jockey for an industry leadership position.
D)how easily it can be substituted by merging with or acquiring another firm with complementary resources and capabilities.
E)whether it is rare and,therefore,something rivals lack.

Question

Quizplus · Accepted Answer

A resource or capability is a source of sustained competitive advantage only if it is rare, meaning that rivals lack it. If a resource or capability is not rare, competitors can quickly copy or imitate it, and the competitive advantage will soon disappear. Robust resources and capabilities are useful, but not enough to generate a sustained competitive advantage if they are not also rare. Competitive volatility may be a consequence of a resource or capability, but it is not a measure of its competitive power. Merging with or acquiring another firm with complementary resources and capabilities may be a way to enhance a company's competitive power, but it is not a substitute for having rare and valuable resources or capabilities.

The Competitive Power of a Company Resource or Competitive Capability