Sources of Competitive Advantage and Firm Performance: The Case of Sri Lankan Value-Added Tea Producers

Given the greater importance of firm-effects as opposed to industry-effects in explaining firm performance, this study incorporated the resource and strategy-based views of the competitive advantage paradigm in explaining the performance of value-added tea producers in Sri Lanka. The study revealed the existence of three significantly different strategic groups and justified the assertion that there is significant intra-industry heterogeneity. Only one strategic group, which comprised four dominant firms, revealed strong mobility barriers and higher performance differences. However, no performance differences were evident between the other two strategic groups.