How Do Enterprises Transform External ESG Pressures into Sources of Competitive Advantage? —A Cross-Country Comparative Case Study_Vol. 3 No. 3 (JBM 2026)_Journal of Business and Marketing (ISSN: 3005-5717)

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How Do Enterprises Transform External ESG Pressures into Sources of Competitive Advantage? —A Cross-Country Comparative Case Study

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DOI: https://doi.org/10.62517/jbm.202609302

Author(s)

Mo Cao

Affiliation(s)

Pennsylvania State University, State College, United States

Abstract

Environmental, Social and Governance (ESG) activities are increasingly becoming a major source of external pressure for firms in all industries. Although the extant literature strongly supports the positive association between ESG performance and firm outcomes, several companies still consider ESG as a compliance-driven obligation instead of a strategic resource. This paper explores how firms transform external ESG demands into internal strategic competencies and, ultimately, sources of competitive advantage. This study using descriptive multiple-case studies method examines six MNEs-BYD, Huawei, Haier, Tesla, Apple, and Unilever-to provide a comparative analysis of ESG responses and adaptation across different institutional and market environments. Based on the institutional theory, the resource-based view, stakeholder theory and dynamic capability theory, the study identifies typical mechanisms of how ESG issues are internalized and then transformed into innovation & capability, supply chain resilience, governance efficacy and brand trust [2][3][8]. Findings are consistent with the view that ESG can be managed not only as a legitimacy requirement but also as a strategic resource when captured in critical managerial systems. This research makes a contribution to the ESG and strategic management literature by explaining the transformative mechanism from ESG pressure to sustainable competitive advantage and provides insightful managerial implications for companies seeking long-term competitiveness.

Keywords

Environmental, Social, and Governance (ESG); Competitive Advantage; Strategic Capability; Case Study; Institutional Pressure

References

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