The development of the concept of competitive advantage and how these Literature review

The development of the concept of warring return and how these ideas find been taken up and bear influenced the enginee - Literature review Example agonistic usefulness not only provides firms with the necessary edge scarce it also ensures that they are able to create and maintain ecological niche position in the market. Hence, elements of competitive expediency become major tools of survival in highly competitive business environment of modern times. The paper would be mainly discussing the development of the concept of competitive vantage of firms and it is exploited by businesses to maintain market position. Concept of competitive advantage The concept of competitive advantage is complex in its scope and therefore is difficult to define with conclusive authority. Many scholars have attempt to unravel the factors that can be applied universally for all businesses but have failed to do so. though early scholars had tried to identify strength and weaknesses of business stra tegies and plans that could be exploited by businesses to compete against their rivals, the voice communication competitive advantage remained elusive (Andrews, 1971 Ackoff, 1970). Interestingly, Penrose (1959) and later Ansoff (1965) had used the word but only to describe as how to compete. For them, various components of business strategies were of the essence(p) issues within competitive advantage and were required to be identified as strength or weaknesses so that they can be used to compete against the rivals in industry. ... It therefore, provides huge speculation for factors or elements that could still be used by firms to gain competitive advantage. The generic strategies vis-a-vis appeal leadership, differentiation and focus were promoted as major ingredients of competitive advantage by Porter. But in the contemporary environment of recessive trends and changing format of social structure, these factors are used by all firms. They have become an easy means of survival b ut in the tough times, they could be caught in the sinful war of price cut leading to loss and closure. Thus, something more is required for firms to gain competitive advantage or CA. Hay and Williamson (1991 42) describe CA as capabilities which give the firms relative advantage against the rivals. Barney (1991 99) also asserts that CA is value creating strategy that is unique and is not used by competitors. Both scholars were aware that CA is important aspect of businesses but were deficient in describing the elements that constitute CA. The definition was abstract in its content but at the same time, gave invaluable insight into the importance of having competitive advantage. Kay (1993 24) believed that CA is a measurable pecuniary performance outcome that can be defined as ratio of added value to the firms gross or net output. Most important is the fact that Kay had used it as a tangible asset or value addition to the product and services that help the firms to improve their financial outcome. The criteria lose its essence in the fast transforming scenario of emerging new paradigms in intangible assets and business compulsions. Competitive advantage cannot be confined within the context of tangible products and viewed objectively for its value added services. The transforming values have