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competitive advantage

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    Ppt competitive advantage Ppt competitive advantage Presentation Transcript

    • 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
    • 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.
    • 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.
    • Contents
    • What is the
      Competitive Advantage?
      Competitive Advantage means
      Something that places a company
      or a person above the competition
    • 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
    • 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.
    • 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
       
    • 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
    • What is the
      Competitive Advantage?
      Cost advantage
      Similar product
      At lower cost
      Competitive Advantage
      Higher price
      For unique product
      Differentiation
      Advantage
    • What is the
      Competitive Advantage?
      A Model of Competitive advantage
      Resources
      Cost advantage
      Or
      Differentiation advantage
      Distinctive
      Competencies
      Value
      Creation
      Capabilities
    • 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
    • What is the
      Competitive Advantage?
      Main aspects of
      five forces analysis
    • What is the
      Competitive Advantage?
      Competitive advantage strategies
    • 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.
    • 2. Sorce of Global
      Competitive Advantage
    • 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.
    • 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
    • 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.
    • 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.
    • 2. Sorce of Global
      Competitive Advantage
    • 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.
    • 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
    • 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.
    • 3. Competitive Advantage
      By Porter
      How a firm can actually
      create and sustain a
      competitive advantage
      in its industry?
    • 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
    • 3. Competitive Advantage
      By Porter
      Two Basic Types
      Both can be more broadly approached or narrow, which results in the third viable competitive strategy
    • 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.
      • 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.
      • Note: if more than one company aim for cost leadership, usually this is disastrous.
      • Often achieved by economies of scale
      • 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.
    • 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.
      • 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.
    • 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
    • 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.