Question

Discuss the four criteria that the resources of a firm must possess to maintain a sustainable advantage. Give an example of one of these criteria.

Answer 1

An organisation to achieve a high degree of competitive advantage must have a remarkable set of resources that should exhibit these criteria to achieve a sustainable development:

1. Valuable: The resources employes shouldn't be general. They should have some value associated with them that would show their importance for the organisation to achieve glory.

2. Rare: The resources should also be rare and not easy to find. They should be exclusive and specific and hard to track in the market.

3. Tough to Imitate: The resources should be difficult to be copied or be imitated by any other company. This is because if any resource is easy to copy, it won't have its importance for the organisation to serve.

4. Non Substitutable: At last, the resources should be non substitutable which means there should ne no or less substitutes available in the market to take their place.

The example I would like to talk about is of Tough to Imitate criteria. Let's consider the example of the human resource of your organisation. You have people who are skilled not only in the technical department but your organisation provides daily good training and development sessions which made their managerial, leadership and communication skill also grow. These skills have now turned into the capabilities of your human resource which are hard to be copied by any other organisation as every human has their own skillset and capabilities. Thus, making your human resource grow better, you have achieved sustainable development and growth for your firm.