Examine the assertion that the success of a multinational company depends on exploiting the opportunities and blocking threats in the international markets. This corresponds to Porter’s concept of ‘environmental fit’ that allows the company to improve its competitive…
Multinational companies have previously enjoyed the benefits of competitive advantage in the respective markets as a result of their ability to position themselves in the market and exploit resources. However, the values of competitive advantage are under threat as a result of increasing competition, and also the volatility in the market. For example, clothing companies were able to exploit the low cost labour market in some parts of the world, but improved communication links and the Internet have resulted in public outcry over perceived exploitation. The countries involved in supplying these companies have also benefited from the infrastructure and equipment injection which has resulted in an increase in wages. This suggests that the competitive advantage of multinational companies can no longer be guaranteed which has prompted most to seek out sustained competitive advantage.
Sustained competitive advantage is when the benefit of implementing value is prolonged, especially when value strategy is one which cannot be duplicated (van Zyl 2006). This would suggest that more and more companies are investing resources into researching value-creating strategies in a bid to maintain their market positioning and competitive advantage. This coursework aims to provide evidence that above-average performance in the long-run is the basis of sustainable competitive advantage. This will be achieved using the following objectives:
Sustained competitive advantage is largely down to value creating strategies which serve to differentiate the organization and create a unique selling point for it. However, one must also remember that the success of any strategy will be determined by the efficiency and effectiveness of the application of organization-specific competitive resources and the exploitation of the potential capabilities they provide (van Zyl 2006). When one considers the nature or what ...
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