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Which of the following leads to sustainable competitive advantage?
| a. | A high potential for competing firms to create or buy a company’s information technology | |
| b. | Continuous improvement of the hardware and software used by a company | |
| c. | A similarity in information technology used across competing firms | |
| d. | Using information technology to continuously improve the core functions of a company |
Expert Answer
- Acquisition of attributes/ resources
- Helping to stay ahead in competition. Thus, such attributes must be UNIQUE ones which should help the company to DIFFERENTIATE itself from the competitors
- Long term effect (i.e. sustainability)
Continuously improve hardware or software used by the company may not provide sustainable competitive advantage as it can be presumed that its competitors also will be improving its hardware and software technology to stay abreast with latest technology.
Similarly purchasing a company’s information technology will not provide competitive advantage to any firm since such technology is equally available to other competitors also.
A similarity in information system used across competing firms does not create uniqueness for any of the competing firms.
Thus, it can be safely assumed that all above options do not create any sustainable competitive advantage for any firm.
However, using information technology as means to improve its core functions may offer unique advantage to the respective company. Once its core functions improve through use of technology, it can help the company to create its unique position in the market place in terms of process supremacy/ product positioning / cost competitiveness etc. Such improvements in core functions are irreversible and thus sustainable.
Therefore, correct answer should be:
| ANSWER: USING INFORMATION TECHNOLOGY TO CONTINUOUSLY IMPROVE THE CORE FUNCTIONS OF A COMPANY |
