Competitive Advantage Maintenance
When an enterprise achieves a competitive advantage that places its profit levels above those of its competitors, it is also the time in which our competition will try to tumble that harvested advantage. They must cope with this difference, which is not easy and takes quite some time. We can well say it depends on the strategy followed and that it can mainly take two paths: imitation and innovation.
Imitation is simplest way an enterprise has to match an advantage in favour of another enterprise. We can state that if an advantage is easily copied, it doesn't represent a substantial advantage for the enterprise that possesses it. This means, this advantage has an expiration date. Through innovation, it will depend, as we mentioned before, on the resources and capabilities of the enterprise.
Since the possibility of imitation is relatively simple, the leading enterprise (the enterprise that has this competitive advantage in its favour) must try to avoid imitation. Remember that imitation. is the most direct form competing enterprises have to match an advantage. The act of avoiding imitation. is what Rumelt calls Isolation mechanisms. These represent barriers or shields against imitation. which, when more efficient, will result in a longer lasting competitive advantage for the leading enterprise. To learn about these shields against imitation., we have to test the imitation. process of the competition. In order for this process to be successful, it must comply with the following considerations:
• Identification.- the enterprise must be aware that its competition has a competitive advantage which makes it superior.
• Incentive.- we understand it in the competitive sense, of improvement of average profit, as the leading enterprise already does.
• Diagnosis.- in-depth analysis of the strategy followed by the leading enterprise and which makes it count with a competitive advantage in its favour.
• Resource acquisition.- to imitate this enterprise, we must have, at least, the same resources available.
In the following sections, we will decompose each one of these isolation mechanisms through which we avoid the competition from easily imitating a competitive advantage.
