Is Competitive Advantage Intellectually Sustainable?

Abstract

The notion of competitive advantage has been central to the field of strategic management since the publication of Michael Porter’s pioneering books four decades ago. Nevertheless, the ambiguity of competitive advantage remains problematic. Does competitive advantage mean achieving the highest profit, above-average profit, positive economic profit, the low-cost position, or the largest value gap in a segment or market? I argue that competitive advantage is too equivocal to be a legitimate concept for strategy, and regarding it as such hampers the advancement of the field. Rather, we should regard competitive advantage as a conceptual umbrella for performance comparisons, and focus our attention on developing and refining performance measures. The fact that performance has multiple dimensions poses a problem for competitive advantage but represents an opportunity for the field.

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