Business Strategy"Sources of competitive advantage rarely produce added value that can be sustained over time."The following essay will attempt to evaluate the above proposition and find out whether it is possible to add value in a continuous for a period of time. I will first talk about what competitive advantage is and what it means for a company. I will then explain the sources of competitive advantage and how a company's distinctive capabilities enable it to sustain added value. The discussion is based on a number of points of view from different authors which will be clearly indicated and acknowledged. I'll start by explaining what competitive advantage is. So, what is competitive advantage? In a number of industries, the average performance of the industry is usually no better than the average performance of the entire industry. However, particular companies or groups of companies manage to do much better than average. In this case, the high-performing firm or subgroup has something special and difficult to imitate to offer that allows it to outperform rivals. Porter (1985) refers to such special resources as the firm's competitive advantage. "The competitive advantage of a company consists of those characteristics that allow it to obtain good results even in the face of mediocre performance at sector level and free access to the entire sector." The company has certain capabilities that allow it to be different from other companies in the industry. the industry. It has some distinctive capabilities that cannot be reproduced by competitors. However, it is not sufficient for this characteristic to be distinctive. It also needs to be sustainable over a period of time. As Oster (1994) points out: “Key success factors in an industry are those resources that enable a company to outperform its rivals over a sustained period of time.” Competitive advantages are always relative. For example, Sainsbury's has a very slight competitive advantage over Tesco. These companies serve similar markets and consider themselves members of the same industry and strategic group. Tesco has a competitive advantage over Argyll. In a pairwise comparison, one firm will have a relative competitive advantage over another. The resource-based theory of the firm states: "If all firms in a market have the same stock of resources and capabilities, no strategy for creating value is.... .. middle of the paper...... ge that a company has in the market. Word Count: 1450 words Bibliography Combined bibliography for an essay and a related case study. Corporate Resources and Sustainable Competitive Advantage, 1991 J. Barney Foundations of Business Success, 1995 J. KayModern Competitive Analysis, 1994 SM OsterCompetitive Advantage, 1985 Micheal PorterOther sources:Exploring Corporate Strategy, 1989 G. Johnson & K. ScholesIBM website on the Internet, http://www.ibm.comNewspaper articles and CD ROMCombined word count: 2500 words