Organisations compete on various dimensions. Competitive Advantage as described from the HRINZ Business Performance Course, occurs when a strategy creates positive economic value for a firm and which no other competitor is simultaneously implementing (short term approach)
When competitors are incapable of duplicating the benefits of a firms competitive advantage and cease their attempts to do so, then a sustained competitive advantage is said to exist for that organisation (long term approach). Resources can also provide a sutained competitive advantage.
The objective is to match HR policies of an organisation with its dominant competitive strategy, the value proposition is by using the firms competitive strategy to guide the organisations choices about waht HR policies to implement ultimately helps align the employee behaviour in ways to contribute to this competitive strategy leading to organisational success.