Prahalad, within any particular market segment, it is the company's relative competitive advantage that determines actual profitability and growth. A great deal of factors has to be taken into consideration when one is considering the impact a particular nation's industry will compete. A few of the these factors consist of the monetary and fiscal policy, trade and industrial policy, national levels of education, the structure of corporate ownership, and the social norms and values of a particular nation (76). Many managers feel that these are the issues that should be paid the most attention to. However, these are not the only major factors that should be taken into account.
In order to accurately assess the problems associated with why some companies succeed, while others fail, in competition Hamel and Prahalad argue that the managerial frame must be broken down into components. "The assumptions, premises, and accepted wisdom that bound a company's understanding of itself and its industry and drive its competitive strategy determine which "diseases" a company will fall prey to and which it will avoid (76)." It is important to note that managers acquire their points of references from many sources. Some of these sources include peers, business schools, consultants, and other educational experiences. Under the given frames of reference, Hamel and Prahalad suggest that it is the managerial frames that bound a company's competitive warfare therefore determining the competitive outcomes. In competition on a global level, long-term competitiveness depends on managers" willingness to continually change their managerial frames. .
Another key element for top managers to succeed in gaining a competitive advantage is to understand to concepts of company fit versus company stretch. As given in the article, the concept of fit is the relationship between the company and its competitive environment (77).
