A firm with a sustainable competitive advantage offers a value proposition that rivals can neither imitate nor substitute.
This enviable position is achieved when the resources and capabilities that create and deliver the value proposition are:
Rare
Valuable
Without alternatives
Sustainable advantage is uncommon as few firms are in possession of resources that meet the three criteria. (Pharmaceutical companies enjoy this type of advantage when they are selling on-patent medications.)
A more common but less enduring form of advantage is rooted in how efficiently a business utilizes its resources and capabilities. All else being equal, a model will yield an earnings advantage if its resources are used more efficiently to create/deliver the value proposition.
A lot has been written recently about competitive advantage. Most of the robust writings come from microeconomics-driven views of business and competition. Harvard's approach, in contrast, has a more managerial nature. It's robust and intellectually powerful. The article is not as easy to read as others that I've recommended but well worth the effort
To improve your mastery of the business model template: Chickens and Pigs - The Book
