In order to get better performance and sustainable competitive advantages, a company has to focus on the characteristics of its resources and…

(b) To achieve better performance and sustainable competitive advantage, a company must focus on the four major characteristics of its resources and capabilities which determine the sustainability of its competitive advantage: (i) Durability: Durability refers to how long the firm's resources and capabilities remain effective before they deteriorate or become obsolete. For example, in industries with rapid product innovation, such as technology, patents may quickly become outdated. In contrast, strong brand names often possess a high degree of durability, contributing to sustained competitive advantage. (ii) Transferability: Transferability determines how easily a competitor can acquire or replicate the resources and capabilities. If key resources and capabilities can be easily transferred between firms (such as through hiring key personnel or acquiring technology), the competitive advantage is less sustainable. The more difficult it is for rivals to gain access to similar resources, the more sustainable the advantage. (iii) Imitability: This refers to how easily competitors can imitate or develop the same resources and capabilities. If imitation requires complex processes, organizational routines or is dependent on a firm's unique corporate culture, it becomes difficult to replicate. For instance, in financial services, where innovations are not legally protected, imitation is easier, reducing sustainability. (iv) Appropriability: Appropriability refers to the ability of the firm's owners to appropriate the returns on its resource base. Even where resources and capabilities are capable of offering sustainable advantage, there is an issue as to who receives the returns on these resources.