- Competence of the firm’s management. More
competentmanagementwillbeabletoslow,though
notstop,thelossofcompetitiveadvantageovertime
bycreatingstrategiesthatfindnewmarketstoexploit
the firm’s current competitive advantage and new
sources of competitive advantage. - Easeofentryintothefirm’sbusiness.Thegreaterthe
barriers to others entering the firm’s business,
because of either capital requirements or
technologicalfactors,theslowerwillbethelossof
competitive advantage.
These factors are summarized in Figure 18.8, with the
appropriatediscounted cash flow modelindicated for each
combination of the factors.
FIGURE 18.8Discounted Cash Flow Models
Status Quo versus Optimal Management