The Corporate Brand: An Intangible Resource as a Basis for Sustainable Competitive Advantage
Abstract
Studies of the sources of sustainable competitive advantage basically focus on one of the following alternatives: isolating the opportunities and threats and describing the strengths and weaknesses of the companies or analyzing how the first and second alternative to be integrated in order to choose the appropriate strategy. This is the main subject analyzed in this paper. Thinking that the competitive advantage, rather than the external environment, is the primary source of profitability for the company, the attention of companies is drawn towards the sources of sustainable competitive advantage. The resource position of the company is an equally important issue in strategic management just as the choice between differentiation and cost leadership in either wider or narrower market segment. For example, the selection of a strategy of cost leadership implies the existence of: economy of scale, superior process technology, ownership or access to cheap inputs as well as cheap labor. Analogous to this, the advantage of differentiation involves: strong brand, reputation, protected technology, specific channels of distribution and specialization in sales and aftersales services.
The purpose of this paper is to show that the company's strategy should defocus from the claims for monopoly profits (returns from market power) and look for the Ricardo’s earnings (return on the resources that provide a competitive advantage over the actual cost of such resources). The corporate brand as the most specific resource of companies plays well such a role. The process of selection and implementation of the strategy should result in a choice that most effectively utilizes this key resource.
Thus, the research involved analysis of a sample of companies, using a semi-structured questionnaire and the results were acquired through proper statistical analysis.
The research results lead to a clear understanding of the dominance of the corporate brand in terms of the features that a source of sustainable competitive advantage should meet.Downloads
References
Porter, M., Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1998, Free Press, NY
Porter, M., Competitive Advantage: Creating and Sustaining Superior Performance, 1998, Free Press, NY
Stern, W. and M. Deimler, The Boston Consulting Group on Strategy: Classic Concepts and New Perspectives, 2006, John Wiley & Sons Inc., NJ
Ricardo D., Principles of Political Economy and Taxation, 1891, G. Bell, London, UK
Schumpeter, J., The Theory of Economic Development, 1934, HBS Press, MA
Penrose, E., The Theory of the Growth of the Firm, 1959, John Wiley&Sons, NY
Teece D., “Economies of Scope and the Scope of the Enterprise”, Journal of Economic Behavior and Organization, 1980, Vol 1, pp.223-247;
Rumelt R., “Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition”, Bell Journal of Economics, 1982, Vol 23, pp.418-438
Teece D., “Capturing Value from Technological Innovation: Integration, Strategic Partnering and Licensing Decisions”, Interfaces, 1988, Vol 18, No. 3, pp.46-61
Barney, J., “Firm Resources and Sustained Competitive Advantage”,Journal of Management, 1991, Vol. 17, No.1, pp.99-120
Ingemar D. and K. Cool, “Asset Stock Accumultation and the Sustainability of Competitive Advantage”, Management Science, 1989, Vol 32, No.12, pp.1504-1513
Rouse, M. and U. Daellenbach, “Rethinking research methods for the resource-based perspective: Isolating sources of sustainable competitive advantage“, Strategic Management Journal, 2001, Vol. 20, p.118
Porter, M., “From Competitive Advantage to Corporate Strategy“, Harvard Business Review, 2001, Boston, MA, Vol. 73, pp.258-271
Schmalensee R., “Industrial Economics: An Overview”, Ecomomic Journal, 1998, Vol. 98, pp.643-681
Snow C. and L. Hrebiniak, “Strategy, Distinctive Competence and Organizational Performance”, Administrative Science Quarterly, 1980, Vol. 25, pp.317-336
Grant, R., “The Resource – Based Theory of Competitive Advantage: Implications for Strategy Implementation“, California Management Review, 1991, Vol.33, No.3, p.122
Grant, R., Contemporary Strategy Analysis, 1991, Blackwell Publishers, Cambridge, MA
Dess, G., T. Lumpkin and A. Eisner, Strategic Management: Creating Competitive Advantage, 2009, McGraw-Hill, NY
Barney, J., Gaining and Sustaining Competitive Advantage, 2006, Addison Wesley Publishing Co., Boston, MA
Jensen, B., Simplicity: The New Competitive Advantage in a World of More, Better, Faster, 2000, Perseus Books, Cambridge, MA
Hamel, G. and C. Prahlad, Competing for the Future, 1994, HBS Press, MA
Porter M., The Competitive Advantage of Nations, 1990, Free Press, NY