helen mba _2 - Nelson Mandela Metropolitan University

2.5.4 Shifting input costs or availabilityCompetitive advantage frequently changes when a significant change occurs in theabsolute or relative costs of input such as labour, raw materials, energy,transportation, communication, media or machinery.According to Strickland and Thompson (1999:87), the widening and shrinkingdifferences in the cost and efficiency among key competitors tend to alter the state ofcompetition. This may reflect new conditions in supplier industries or the possibility ofusing a new or different type of quality of input. A firm gains competitive advantage byoptimising opportunities based on the new conditions, while competitors are left withassets and approaches linked to the old conditions.2.5.5. Changes in government regulationAdjustments in the nature of government regulation, in such areas as productstandards, environmental controls, restrictions of entry and trade barriers, are othercommon stimuli for innovation, which may result in competitive advantage.According to Strickland and Thompson (1999:88), in international markets, hostgovernments can drive competitive changes by opening up their domestic marketsto foreign participation, or closing them to protect domestic companies.2.6 SUSTAINING COMPETITIVE ADVANTAGEAccording to Strickland and Thompson (1999:135), a company’s competitive strategyconsists of its business approaches and initiatives to attract customers and fulfill theirexpectations, to withstand competitive pressures, and to strengthen its marketposition. As mentioned in Chapter one, Porter (1986:20) views competitiveadvantage as a function of either providing comparable buyer value more efficientlythan competitors (low-price strategy), or performing activities at comparable cost butin unique ways that create more buyer value than competitors (differentiation60