Question

Certain companies like Apple, Southwest Airlines, and Amazon seem to be able to maintain a strong competitive advantage within their respective industries. How are they able to do so? What do they need to do to sustain their competitive advantage?

Answer 1

Established companies like Apple, Southwest Airlines, Amazon, etc. have maintained a strong competitive advantage in their industry. The primary factors which attribute to this success are as follows:

• The business model of the company must be in alignment with the culture and value system of the company
• These companies conduct industry and business analysis comprehensively so as to have a deep understanding of aspects which are prevalent in the market
• These companies do not hesitate to change, they embrace the change
• These companies have given the leverage to their employees to think innovatively and take risks
• These companies capitalize on the potential of latest trends and technologies

To sustain their competitive advantage, these companies must implement the following:

• Keep the VRIO framework of the company updated
• Anticipate changes and trends in external environment through PESTLE analysis
• The company must keep a tab on the cost advantage as well as differentiation advantage of the business