The competitive advantage period and the industry advantage period

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A key objective in strategic management research is to identify the sources and determinants of profitability differences among firms. Theoretical perspectives on superior economic performance focus on competitive advantages relative to rivals and industry structural characteristics. Michael Porter’s foundational work highlighted the positioning effect and the industry effect as crucial performance influences. Numerous empirical studies have explored these areas, primarily examining external factors like market entry barriers and industry concentration, as well as internal factors such as competitive strategies and resources/capabilities. Strategic group membership has also been studied as an intermediate factor. However, research on the sustainability of superior economic performance is notably limited, with no existing empirical study quantifying the duration firms maintain superior performance across different industries. Thomas Fritz addresses this gap in his PhD thesis by defining the competitive advantage period (CAP) and the industry advantage period (IAP). His work provides insights into the sustainability of performance differences at both intra-industry and inter-industry levels, contributing significantly to the understanding of long-term economic performance in strategic management.