CA Inter P6 · Chapter 12 · Question 10 of 10
Which statement about competitive advantage is correct?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Competitive advantage is sustainable only if competitors cannot easily copy or neutralise it over a long period
Explanation
A firm has a competitive advantage when it creates more value for customers than rivals, whether through lower cost or differentiation. The advantage becomes sustainable only when it rests on resources and capabilities that are hard to imitate or substitute. Most advantages wear away as competitors respond.
More Strategic Analysis: Internal Environment MCQs
- Q2Under the four criteria used to identify capabilities that are core competencies (and a source of sustainable competitive advantage), a…
- Q3According to Michael Porter's generic strategies, a firm that produces standardised products at a very low per-unit cost for…
- Q4Under Mendelow's matrix, a regulator that has high power to influence an organisation but normally shows little interest in its day-to-day…
- Q5Which of the following is an intangible resource of a firm?
- Q6The distinction between a firm's resources and its capabilities is best expressed as: