How to Measure Sustainable Competitive Advantage a Literature Review

Abstract

In highly competitive and dynamic environment, today, organizations should outperform the competition to survive and flourish. Thus, Strategic Management suggests organizations should achieve sustainable competitive advantages (SCA) to be ahead of competition. Though SCA is a very popular and highly debated concept there is no any definition or accepted measurement criteria for SCA. Many researchers accept the fact that SCA is an organizational level construct. It is observed, different authors have different opinions on measuring SCA. Some authors have used organizations‟ outcome (financial and market indicators) to measure SCA. On the other hand, some authors have suggested that it could be possible to measure organizational SCA using the attributes of VRIN (Valuable, Rare, In -Imitable, Non-Substitutable) resources as described in Resource Based View (RBV) of the firm. The aim of this research is to review literature on past studies which had attempted to measure the construct of SCA and find a set of variables which could be used to measure organizational SCA. It is observed, a limited number of literature is available to cater this requirement. The literature was searched using „Google Scholar‟, for „any time‟, with frame „measure sustainable competitive advantage‟, where 21(15 effective) articles were found; and with frame „measure sustained competitive advantage‟ 19 (11 effective) articles were found. It was found that innovation indicators, capabilities, resource features, product features, resource attributes, financial indicators and market indicators can be used to measure SCA. It is recommended to take measurements over a period of time to validate