4.1.2 Why competitive advantage is important?
To a large extent, the ambition of business strategy is to reach a sustainable competitive advantage.
Competitive advantage examines the economics of a firm's business focusing primarily its ability to generate excess returns on capital and links the business strategy with fundamental finance and capital markets, for a longer period of time.
In the end, it is a firm's competitive advantage that allows it to earn excess returns for its shareholders. Without a competitive advantage, a firm has limited economic reason to exist-- its competitive advantage is its reason of life. Without it, the firm will decline.
Creating a sustainable competitive advantage may be the most important goal of any organisation and may be the most important single attribute on which each firm must place its most focus.
Take some time to think on your firm. There is a clear concern about the permanence of the company in the market for a long time? Is this in any way related with clear and well identified competitive advantages?