Determine the Competitive Value of a Company Resource
A company’s value chain identifies the primary activities that create value for customers the related support activities. It is a primary analytical tool for strategic cost analysis. Competitive Value is the cornerstone of a company’s revenues and profits. Competitive advantages give a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders.
There are basically four tests for determining the competitive value of a company resource. These are as follows:
Scarcity: Is the resource widely available? If it is, then it’s not likely a source of competitive advantage.
Inimitability: Is the resource hard to copy? The resource that is easy to imitate, is of little competitive advantage because it will be widely available from a variety of sources.
Durability: How long does the resource last? The longer a resource lasts, the greater its value.
Suitability: Who profits from the value created? The more a resource earns a profit, the greater it’s value.
Substitutability: Are there feasible alternatives to the resource? If no, then it has a greater competitive advantage.
Superiority: Is the resource competitively superior? Companies should believe that their resources are more powerful than that their competitor.
So, these are the various tests for determining the competitive value of a company resource.
