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Ppt competitive advantage

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competitive advantage

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  • 1. Competitive
    Advantage
    G2
    Subject : Global Firm
    Prof. : Tae Koo Kang
    G2 : Koo min-woo(200510085)
    Song Eun-gwon(200510227)
    Kim Jun-won(62338)
    Jang Seo-young
  • 2. Opening Case
    In 2007, Hyundai motor company
    has put a new car on markets.
    The new car is “GENESIS”
    Genesis’ main consumer target is
    high-income grade.
    The reason of launching Genesis is that
    Hyundai motor will be target a high-grade
    car market over the world.
    Until 1990s, Hyundai was treated
    “ Cheep price, suitable quality “
    In US car market.
    But, Global car market is more and more intense.
    So, Hyundai do not survive existing cost-leadership strategy.
  • 3. Opening Case
    In 2007, Hyundai motors has launching High-Class Premium Car “GENESIS”
    The Means of GENESIS is that Hyundai will be concentrate the premium
    car market and Differentiation is new strategy on Hyundai.
  • 4. Contents
  • 5. What is the
    Competitive Advantage?
    Competitive Advantage means
    Something that places a company
    or a person above the competition
  • 6. What is the
    Competitive Advantage?
    The company will be able to apply to strong point
    Without being what does not evaluate a property and the ability which the company possesses
    Competition company comparison will lead and the strong point which is relative could be grasped.
    The strategy which sees from viewpoint of competitive advantage
    Continuous a competitive advantage reinforcement and competitive advantage endeavors not to disappear
  • 7. What is the
    Competitive Advantage?
    The reason of enterprise
    have a competitive advantage
    Resource/Performance
    1. Customer satisfaction and loyalty increase, Increase of profit
    , Increase of market share
    -> bring market perfomance
    2. The product offering which is value in the market
    ->  competitive advantage offering valuable product and service
    3. various size and scope and profitability of company
      ->The competitive advantage makes the base will be able to expand the enterprise which is various.
  • 8. What is the
    Competitive Advantage?
    Competitive Advantage Cycle.
     
    Step 1. Source of Competitive Advantage
              Superior assets
              Super Capabilities
            Key Success Factor
     
    Step 2. Barriers to Imitation
             
    higher the barrier to entry to company
              When the new business opportunity
    coming from the Market which enters
    first mover advantage
           barriers to imitation
     
  • 9. What is the
    Competitive Advantage?
    Step 3. Value proposal form of competitive advantage
              Operational Excellence 
              Product Leadership
              Customer Intimacy           
           
    Step 4.Eencroachment prevents of competitive advantage
            
             New competitive advantage position construction
           effort encroachment prevents of competitive advantage  
    Reinvestment of profit
             asset and capability accumulation
             resource strengthen of competitive advantage
  • 10. What is the
    Competitive Advantage?
    Cost advantage
    Similar product
    At lower cost
    Competitive Advantage
    Higher price
    For unique product
    Differentiation
    Advantage
  • 11. What is the
    Competitive Advantage?
    A Model of Competitive advantage
    Resources
    Cost advantage
    Or
    Differentiation advantage
    Distinctive
    Competencies
    Value
    Creation
    Capabilities
  • 12. What is the
    Competitive Advantage?
    Main aspects of five forces analysis
    1. the rivalry between existing sellers in the market
    2. the potential threat of the entry of new competitors
    3. the threat of substitute products becoming available
    the market
    4. the bargaining power of consumer
    5. the bargaining power of suppliers
  • 13. What is the
    Competitive Advantage?
    Main aspects of
    five forces analysis
  • 14. What is the
    Competitive Advantage?
    Competitive advantage strategies
  • 15. What is the
    Competitive Advantage?
    Cost Leadership (Low Cost Strategy)
    cost Leadership mean that produce goods level of equal more in expensive
    2. differentiation (Differentiation Strategy)
    Differentiation is that provide inventive value can improve of perceive valued of consumers toward product(or service) in the market.
    3. Focus Cost Leadership / Differentiation:
    When competition's range is narrow, in other words when target on specific customer segment will be focused cheap price and differentiation strategy.
  • 16. 2. Sorce of Global
    Competitive Advantage
  • 17. 2. Sorce of Global
    Competitive Advantage
    Adapting to Local Market Differences
    Companies must respond to the inevitable heterogeneity they will encounter in these markets.
    Differences in language, culture, income levels, customer preferences, and distribution systems.
  • 18. 2. Sorce of Global
    Competitive Advantage
    (a) Increased market share.
    (b) Improved price realization.
    Offering standard products and services across countries reduces the boundaries of the served market to only those customers whose needs are uniform across countries.
    - Tailoring products and services to the preferences of local customers enhances the value delivered to them.
    - A portion of this increased value should translate into higher price realization for the firm
  • 19. 2. Sorce of Global
    Competitive Advantage
    © Neutralizing local competitors.
    One of the natural advantages enjoyed by most local competitors stems from their deep understanding of and single-minded responsiveness to the needs of the local market.
  • 20. 2. Sorce of Global
    Competitive Advantage
    Exploiting Economies of Global Scale
    Building a global presence automatically expands a company's scale of operations, giving it larger revenues and a larger asset base.
    Potential benefits of economies of scale in various ways: spreading fixed costs, reducing capital and operating costs, pooling purchasing power, and creating critical mass.
  • 21. 2. Sorce of Global
    Competitive Advantage
  • 22. 2. Sorce of Global
    Competitive Advantage
    Exploiting Economies of Global Scope
    Global scope refers to the multiplicity of regions and countries in which a company markets its products and services.
  • 23. 2. Sorce of Global
    Competitive Advantage
    Tapping the Optimal Locations for Activities and resources
    A firm that can exploit these intercountry differences better than its competitors has the potential to create significant proprietary advantage
  • 24. 2. Sorce of Global
    Competitive Advantage
    Maximizing Knowledge Transfer Across Locations
    (a) Faster product and process innovation.
    (b) Lower cost innovation.
    - A second by-product of not reinventing the wheel is considerable savings in the costs of innovation.
    (c) Reduced risk of competitive preemption.
    - A global company that demands constant innovations from its subsidiaries, but does not leverage these innovations effectively across subsidiaries, risks becoming a fount of new ideas for competitors.
  • 25. 3. Competitive Advantage
    By Porter
    How a firm can actually
    create and sustain a
    competitive advantage
    in its industry?
  • 26. 3. Competitive Advantage
    By Porter
    Competitive Advantage Definition
    “Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.”
    -- Michael Porter
  • 27. 3. Competitive Advantage
    By Porter
    Two Basic Types
    Both can be more broadly approached or narrow, which results in the third viable competitive strategy
  • 28. 3. Competitive Advantage
    By Porter
    Approach 1 to Competitive advantage: Cost leadership
    • A firm sets out to become the low cost producer in its industry.
    • 29. Note: a cost leader must achieve parity or at least proximity in the bases of differentiation, even though it relies on cost leadership for it’s CA.
    • 30. Note: if more than one company aim for cost leadership, usually this is disastrous.
    • 31. Often achieved by economies of scale
    • 32. Examples of Cost Leadership: Nisson; Tesco; Dell
  • 3. Competitive Advantage
    By Porter
    Approach 1 to Competitive advantage: Cost leadership
    Steps in Strategic Cost Analysis
    STEP1. Identify the appropriate value chain and assign
    costs and assets to it.
    STEP2. Diagnose the cost drivers of each value activity and
    how they interact.
    STEP3. Identify competitor value chains, and determine the relative
    cost of competitors and the sources of cost differences.
    STEP4. Develop a strategy to lower relative cost position
    through controlling cost drivers or reconfiguring
    the value chain and/or downstream value.
  • 33. 3. Competitive Advantage
    By Porter
    Competitive advantage model 2: Differentiation
    • a firm seeks to be unique in it’s industry along some dimensions that are widely valued by buyers.
    • 34. Note: a differentiator cannot ignore it’s cost position. In all areas that do not affect it’s differentiation it should try to decrease cost; in the differentiation area the costs should at least be lower than the price premium it receives from the buyers.
    - Area’s of differentiation can be: product, distribution, sales, marketing, service, image, etc.
  • 35. 3. Competitive Advantage
    By Porter
    Competitive advantage model 2: Differentiation
    Steps in Differentiation
    Determine who the real buyer is
    Identify the buyer’s value chain and the firm’s impact on it
    Determine ranked buyer purchasing criteria
    Assess the existing and potential sources of uniqueness in a firm’s
    value chain
    Identify the cost of existing and potential sources of differentiation
    Choose the configuration of value activities that creates the most valuable differentiation for the buyer relative to cost of differentiating
  • 36. 3. Competitive Advantage
    By Porter
    Competitive advantage 3: Focus
    - a firm sets out to be best in a segment or group of segments.
    - 2 variants: cost focus and differentiation focus.