Is Competitive Advantage a Necessary and Sufficient Antecedent of Superior Financial Performance?: Evidence From the Maritime Shipping Industry

Although the concept and the sources of competitive advantage have been extensively researched, literature still offers limited answers to the questions why, in some cases, there is overperformance despite the absence of competitive advantage and underperformance despite the presence of competitive advantage. By employing four case studies in dry bulk and container shipping, as its research method, this paper provides real-world evidence on the specific reasons underpinning the relationship patterns of competitive advantage without superior financial performance and superior financial performance without competitive advantage. The findings indicate that rapidly growing markets within an industry enable companies without competitive advantage to enjoy above industry average financial performance. Moreover, principal-principal conflicts and excessive capital expenditure in idiosyncratic firm resources result to underperformance even for companies with competitive advantage. These findings have important managerial and academic implications that are discussed herein.