What is meant by a sustainable advantage?
A sustainable competitive advantage is one that doesn’t disappear for one period to the next – it is difficult for other firms to be able to imitate or substitute the resources, so the advantage persists over time.
What is the timeframe involved in a sustainable advantage?
On the one hand, the word ‘sustainable’ implies that the advantage should last forever. On the other hand, it is hard to envision any competitive advantage that is impossible for another firm to be able to imitate or substitute.
Most often when we refer to a sustainable competitive advantage, we are really considering whether the advantage is likely to last within the moderate to long-term horizon. It is something that is unlikely to disappear within the next say five to ten years (but could potentially disappear over the longer term).
The slight relaxation from infinite to the long-term is important partly because it may simply not be feasible to know whether something will last forever, and in part because a lot of benefits can be gained for relatively long-lasting advantages, even if there is no guarantee that the advantage will persist forever.
Indeed, when considering the strategy of the firm, managers rarely think more than a decade or so in advance (and often a lot more short-term). Further out, it is harder to envision what the future will hold. In the medium term it is possible to have some foresight over what the future may hold – so much further ahead is difficult to gauge.