A public company that can benefit from I/O Model of Above Average Returns is Lockheed Martins. The firm is a giant in the production of military equipment’s like missiles and helicopters.
The company has advanced technology and research team that other firms in the same industry cannot match. This makes the firm to stand out among many firms in the industry it operates in.
But this resources and expertise is very mobile as staffs can move to competitors if they are rewarded well. The firm also relies majorly on supply to the U.S. department of defense. This is risky for Lockheed Martin since if the government slashes or refuses to award the firm contracts it will cripple it.
The ability of a company to realize strategic competitiveness and earn above average returns is pegged on several factors among them competitive advantage, firm’s abilities and expertise and the external environment.
The company has advanced technology and research team that other firms in the same industry cannot match. This makes the firm to stand out among many firms in the industry it operates in.
But this resources and expertise is very mobile as staffs can move to competitors if they are rewarded well. The firm also relies majorly on supply to the U.S. department of defense. This is risky for Lockheed Martin since if the government slashes or refuses to award the firm contracts it will cripple it.
The ability of a company to realize strategic competitiveness and earn above average returns is pegged on several factors among them competitive advantage, firm’s abilities and expertise and the external environment.
