Sustainable competitive advantage in turbulent environments: an integrative model of the industrial economics and resource-based theories in strategic management

Abstract

In today's turbulent economic conditions some organizations are able to sustain their competitive positioning while others, with similar capital and technological resources, seem to struggle to survive. In addition, more and more firms seem to adopt strategies that focus primarily on their internal strengths, capabilities and competencies, while others seem to depend more on external forces to shape their strategies, such as competition, economies of scale, and technological demands. In this paper the author argues that in unstable business environments the integration of internal and external perspectives of strategy formulation is necessary for a firm to sustain advantages for long. The proposed model presents four stages of corporate strategy development: Scouting, Maintenance, Dominance, and Appraisal. The paper utilizes the concepts of critical success factors (CSFs) and critical resources (CRs), describes its applicability by using two cases of companies that adopted similar long-run strategies, and finally offers implications for strategic management and planning practitioners.