MSG Team's other articles

11248 Services Marketing – Definition and its Importance

Stated simply, Services Marketing refers to the marketing of services as against tangible products. As already discussed, services are inherently intangible, are consumed simultaneously at the time of their production, cannot be stored, saved or resold once they have been used and service offerings are unique and cannot be exactly repeated even by the same […]

10861 Must Have Qualities of a Sales Professional

Sales Professionals are the face of an organization. They have the responsibility of making the brand popular and promoting the products amongst the end users. They help in the successful running of organization by generating revenues and earning profits. Let us go through some qualities which a sales professional must have: Patience A sales manager […]

9236 Evolution of Relationship Marketing

Marketing Management has evolved to become a multi faceted and all embracing science over a period of time. Studies in Marketing do not involve the 4Ps anymore. The markets, geographies, the consumer segments have changed leading to multi tier and complex networks and relationships. Marketing Managers of today are no longer following the same rules […]

12340 Ansoff Matrix

Introduction The famous management expert, Igor Ansoff provided a roadmap for firms to grow depending on whether they are launching new products or entering new markets or a combination of these options. This roadmap has been presented in the form of a Matrix that has four quadrants with the axes of products and markets being […]

12534 Building Customer Satisfaction, Value and Retention

In this world of extreme competition, companies with a total focus on customer are going to be the winner. Companies must understand importance of customer satisfaction and then build process around it. A satisfied customer will be a loyal customer. There are large offering of products and services available in the market then why the […]

Search with tags

  • No tags available.

Introduction

The primary problem in the field of strategic management is to answer the question on how firms attain and maintain the competitive advantage. The phenomenon of globalization has resulted in competitive battles fought on a trans-national basis especially in high-technology industries such as information systems services, and software. These globalized forms of competition have established the necessity for an elaborated concept to comprehend how competitive advantage is accomplished.

Competitive Advantage

Multi national organizations like Microsoft, Oracle and IBM are pursuing a resource based strategy of building up useful technology assets, habitually shielded by an assertive attitude by means of intellectual property. Nevertheless, on a regular basis this strategy is not adequate to maintain an important competitive advantage. Successful firms in the global market are quite often those which can exhibit appropriate awareness and positive reaction to the changing business environment.

Fastness and adaptability in innovating products, combined with potential of the management to effectively bring together and reorganize competences both internal and external are features seen in successful firms. Therefore not to the shock of the industry it has been observed that firms which have gathered a huge bulk of priceless technology assets are still lacking the functional capabilities to exploit them.

It is possible that a firm’s competitive advantage is diminished over a period of time. There can be various factors that result in such an erosion of competitive advantage. The two main causes are as below:

  • Replicability which is caused by the expansion of the organization internally
  • Imitatability which is caused by replication from the competitors

Here lies the significance of dynamic capabilities. Strategists consider dynamic capabilities to be the key to competitive advantage.

Dynamic Capabilities

The ability to achieve new forms of competitive advantage is referred to as dynamic capabilities. The two terms dynamic and capabilities by itself require in depth understanding while studying competitive advantage.

The ability to renovate competences so as to accomplish corresponding with the transforming business environment is referred to as dynamic.

The main characteristics of being dynamic are:

  • It requires definite innovation is responding to situation such as the right time to enter the market.
  • The timing is vital in such a case.
  • In addition when there are swift changes in the field of technology and when the character of prospective competition and market is hard to be ascertained the dynamic nature becomes vital for sustained competitive advantage.

The important function of strategic management in fittingly modifying, incorporating and reconstituting the internal as well as the external organizational skills, resources, and functional competences to correspond with the necessity of a transforming environment relates to the term capabilities.

Thus dynamic capabilities address rapidly changing environment. They suggest an organization's capacity to accomplish new and innovative forms of competitive advantage.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

Cultural Levels and Business

MSG Team

Culture and Global Business

MSG Team

Competency Management – Strategy, Purpose and Objectives

MSG Team