Question 3

1. Sustaining competitive advantage can be challenging. The entry of new competitors, the possibility of imitation, and the changes in the firm's context can affect the firm's profitability and, historically, have affected firms that had competitive advantage in very distinctive ways. For instance, Coke and Pepsi have sustained their market dominance for nearly a century. On the other hand, General Motors and Ford were hit hard by competition, in particular of foreign companies entering the market, and never fully recovered. What is different about the product/market situation in these cases that affects the sustainability of their competitive advantage? Which elements of the strategic landscape were responsible for Coke and Pepsi's success and which elements were instrumental in GM and Ford losing an important share of the market?

[15 marks]

1. Provide a brief definition of the concept of co-specialization. Explain the importance of co-specialization for a firm to be able to capture the value created by its assets. Name at least one example of a firm that has cospecialized assets. Explain the relationship between the assets. Has the firm prospered from having those assets together? Why or why not?

[10 marks]