Management: Creating and Sustaining Competitive Advantage

Subject: Management
Pages: 5
Words: 1125
Reading time:
4 min
Study level: College

The company’s competitive advantage is the result of an effective strategy. In its turn, the company’s strategic approach depends on the effective use of the available resources and on the overall company’s capabilities to create a significant competitive advantage. The managers’ adequate vision of the company’s strategic and competitive position within the market and industry is also important to create and sustain the competitive advantage.

This idea can be supported with references to the example of the Coca-Cola Company, which remains to be the world leading beverage producer. Thus, the company’s resources and capabilities are important to develop the effective strategy to promote the company within the market, and this fact contributes to creating the sustainable competitive advantage, if the strategy’s opportunities are evaluated effectively, and if the needs of stakeholders are met.

Why Company’s Resources and Capabilities are Central to the Strategic Approach

The effectiveness of the chosen and developed organization’s strategy directly depends on the quality of resources and capabilities which should be evaluated effectively to determine weaknesses to remove and strengths to support. The company’s resources and capabilities are the competitive assets which make the chosen strategy unique and which should contribute to the strategy’s progress.

It is impossible to develop a competitive strategy without determining the company’s strong resources and capabilities (Thompson, Strickland, & Gamble, 2004, p. 116). Thus, Coca-Cola mostly relies on intangible resources while focusing on the company’s brand, international image, and reputation.

This approach is supported with references to the concentration on such tangible resources as the production technologies and trade secrets (Buigues, Jacquemin, & Marchipont, 2000, p. 52; The Coca-Cola Company, 2013).

To improve the company’s position within the market, it is necessary to evaluate the assets’ potential adequately and to develop the necessary strategies to increase the competitive advantage.

Thus, the focus on using ordinary and non-valuable assets cannot contribute to the organization’s competitive advantage, and managers should always compare their approaches and resources with the rivals’ ones as well as provide the independent evaluation of the assets according to the definite criteria (Hoskisson & Hitt, 2007, p. 89).

Referring to the example of Coca-Cola, it is possible to note that the company’s assets cannot be discussed as usual, ordinary, and typical. In spite of the fact that many other companies also produce cola drinks, the specific recipe used by Coca-Cola is unknown, and the strategy is based on the effective brand image and the reputation promoted with the help of the effective marketing and advertising techniques (The Coca-Cola Company, 2013).

How Value Chain Activities Can Affect the Company’s Cost Structure, Degree of Differentiation and Competitive Advantage

The value chain as the combination of marketing, designing, and delivering activities is oriented to establishing the definite vision of the customer value and to create this value. Such primary activities as marketing and such supportive activities as human resource management are important for the creation of the buyers’ value because each detail is important to attract the customer and to contribute to the customer’s loyalty.

From this point, having analyzed the aspects of designing, producing, marketing, and delivering the product, it is possible to decide about the cost structure and to conclude about the effective pricing strategy which can attract customers (Pearce & Robinson, 2013, p. 59).

The focus on higher prices can be explained with references to the idea of differentiation because more attention is paid to supporting the company’s leading position within the market and its reputation.

For instance, the prices for Coca-Cola products are higher in comparison with the competitors, but many resources are spent for promoting the marketing strategy and for supporting the brand name which contributes to the necessary differentiation (The Coca-Cola Company, 2013).

How a Comprehensive Evaluation of a Company’s Competitive Situation Can Assist Managers in Making Critical Decisions

Managers should always know how the company operates within the market and what threats can challenge the company’s competitive advantage. The evaluation of the company’s competitive situation is necessary to develop effective long-term strategies.

The manager should provide the proper SWOT analysis to assess the situation within the industry and to choose the focus on the company’s strengths as one of the strategy’s steps necessary to overcome certain weaknesses in the company’s activities. The manager should evaluate the company’s results in using resources and capabilities to contribute to the company’s progress.

Moreover, it is necessary to promote the success factors to gain an advantage. As a result, the manager can achieve the desired competitive advantage over the rivals (Thompson, Strickland, & Gamble, 2004, p. 120).

The managers in the Coca-Cola Company spend much time investigating the company’s position within the market to have the opportunity to respond to certain threats and challenges immediately. Coca-Cola’s production techniques and distribution system as the company’s strengths are regularly examined to provide the necessary improvements (The Coca-Cola Company, 2013).

How a Company Can Create a Sustainable Competitive Advantage

While discussing the idea of competitive advantage, it is important to state that this notion describes the company’s ability to respond to the customers’ needs and interests more successfully in comparison with the rivals’ efforts.

Focusing on the sustainable competitive advantage, the company intends to propose the lasting reasons for customers to focus on the company’s services and products, as a result, this company gains the leading position within the market for a long period of time (Thompson, Strickland, & Gamble, 2004, p. 123).

Coca-Cola’s brand image strategy and reputation cannot be copied by rivals, but the marketing and advertising strategies can be imitated. However, the company is protected from the negative results of these activities with references to the fact that Coca-Cola’s competitive advantage is based on the reputation supported and promoted during the years.

Once giving lasting reasons to prefer the company’s products, Coca-Cola receives the benefits from the strategy even today when the beverage industry’s market is highly competitive (The Coca-Cola Company, 2013).

Coca-Cola promotes the idea that its products not only differ from the other ones in quality, but they are also valued and purchased by millions of buyers during the decades. Thus, Coca-Cola focuses on supporting the differentiation strategy and responding to the customers’ needs.


The creation of the sustainable competitive advantage is the necessary condition to state the company’s leading position within the market. To succeed within the industry, it is important to pay attention to the regular evaluation of the company’s competitive assets to respond to any changes in the competitive environment.

In this case, managers should determine the company’s strengths and weaknesses to propose the products and services which differ significantly from those proposed by the rivals. The company should always focus on attracting customers and on choosing the strategies which can contribute to the company’s brand image and reputation.


Buigues, P., Jacquemin, A., & Marchipont, J. (2000). Competitiveness and the value of intangible assets. USA: Edward Elgar Publishing.

Hoskisson, R., & Hitt, M. (2007). Competing for advantage. USA: Cengage Learning.

Pearce, J. A., & Robinson, R. B. (2013). Strategic management: Planning for domestic and global competition. New York, NY: McGraw Hill.

The Coca-Cola Company. (2013).

Thompson, A., Strickland, A., & Gamble, J. (2004). Crafting and executing strategy. New York, NY: McGraw-Hill Higher Education.