Sustainable Competitive Advantage

Sustainable competitive advantage is not a useful business concept.
Sustainable competitive advantage is a theoretical construct that derives from the axioms of the ivory tower of economics. For reasons I fail to grasp, economics has achieved an influence on politics and business far beyond its usefulness as an intellectual approach. Nevertheless, the influence is such that if economists are interested in "sustainable competitive advantage" then managers feel they should be interested too.

In the world of economics, they start with the axiom that business exists to maximize shareholder value. Another axiom (or tautology) is that excess value can only come from competitive advantage. It follows that to maximize shareholder value, businesses will seek to find sustainable competitive advantage. That is a prediction from their axioms and is a useful idea for economists.

However, just because they find it helpful doesn´t mean it''s helpful to managers. Physicists tell us that everything in the universe, including whether a product launch will be successful or not, comes down to quantum mechanical laws. That view is useful to physicists but clearly irrelevant to managers.

The theoretical construct of sustainable competitive advantage is too far removed from everyday managerial life to be useful. We don''t even know if such a thing exists in the real world or what it would look like or even to what extent it would look the same from place to place or time to time.

Managers should be focusing on meeting customer needs, executing plans, motivating employees, and other such activities which will keep the firm going for the next few years. If we do a good job of these basic managerial tasks, there is every reason to think the firm will survive, even thrive, for the foreseeable future.

Striving for the chimera of sustainable competitive advantage distracts us from the real work at hand.

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