3.3 Economic performance and competitive advantage Every strategy aims at obtaining a Competitive Advantage or it would be meaningless. Competitive Advantage can be defned as an economic advantage obtained in a competitive market or, in other words, it generically corresponds to a diference between two competitors in any conceivable dimension, which allows one to create more value than the other and has traditionally been closely associated with the company. Subsequently, the concept was extended to other realities, being current to apply it to industrial sectors, regions and even countries. The reference to Competitive Advantage nowadays is so usual that many authors already refer to a supposed selfexplanatory capacity of it. On the other hand, new approaches to the subject, more or less innovative, constantly appear in the literature. A diferent and possibly more complex issue is measuring a particular Competitive Advantage. In fact, the measurement of the Competitive Advantage, which even allows organisations to be compared, is often difcult to obtain. Rumelt , among others, recognises the existence of a certain 18 convergence towards the concept of value creation, a concept which itself is not free of doubts and multiple interpretations. In efect, value creation is a broad concept that can be viewed from various perspectives, like those of customers, employees, suppliers, shareholders or other stakeholders of the company, necessarily comprising various points of arrival, according to the respective sensitivities. The process of measuring the Competitive Advantage has been successively addressed by various authors, such as Barney, Calil, Barney & Hesterly, who suggest quantitative/qualitative measurement methodologies of Competitive Advantage as a way of assessing the economic and fnancial performance of organizations. The evaluation of competitiveness, based on economic performance indicators, has limited the concept to the dimension of operational efciency. From this perspective, competitiveness would derive from business excellence in the performance of activities, which can be economically or fnancially measured. The frst aspect to consider is to try to clarify what is meant by "value creation". In line with Brandenburger and Stuart , we will say that the value 19 created by a given company will correspond to the diference between the supplier's opportunity cost and the customer's willingness to pay. The opportunity cost will be given by the minimum value for which the supplier is available to sell its products. This value cannot be determined in an absolute way, as it depends on several variables and on how these variables behave at a given moment in the market. The concept of willingness to pay, on the other hand, represents a monetary value that incorporates all the benefts that the customer receives from the use or consumption of a given product and is always subjective, as it depends on the customer's perception of the benefts ofered. This attribute determines that willingness to pay may vary from customer to customer, and between diferent competitive contexts. In addition, the customer will only value what is perceived by him, so the formulation of any Rumelt, 2003, pag. 1-5. 18 Brandenburger and Stuart, 1996, pag. 5-24. 19 15
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