Competitive Advantage creating and sustaining superior performance, Michael E. Poter 1985
A sustainable competitive advantage.
A challenger must possess a clear and sustainable competitive advantage over the leader, in either cost or differentiation. If the advantage is low cost, the firm can cut price to gain position against a leader, or earn higher margins at industry average prices to allow reinvestment in marketing or technology development. Both will allow a challenger to gain share. Alternatively, if the firm achieves differentiation, it will allow premium prices and/ or minimize the cost of marketing or gaining trial against the leader. Either source of competitive advantage the challenger possesses must be sustainable, using the criteria for sustainability. sustainability ensures that the challenger will have a sufficiently long period to close the market share gap before the leader can imitate.
