Sustainable Competetive Strategy

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strategies for sustaining competitive strategies, and how suzlon applied to sustain its competitive advantage

strategies for sustaining competitive strategies, and how suzlon applied to sustain its competitive advantage

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  • 1. Presented by- : Manas Kumar Saurav Kumar Saurabh Singh
  • 2. SUSTAINABLE COMPETITIVE ADVANTAGE
    • Sustainability is a framework for responding to the emerging competitive threats and maintaining competitive advantage.
    • Sustaining competitive advantage requires erecting barriers against the competition.
    • A competitive strategy consists of moves to
        • Attract customers
        • Withstand competitive pressures
        • Strengthen an organization’s market position
  • 3. CREATE COMPETITIVE ADVANTAGE
    • Cheaper (lower cost) producer: ?
    • Better (superior perceived quality): ?
    • Newer (more innovative/up to date/fashionable): ?
    • Faster (speed to market): ?
    • More desirable/ distinctive (successful branding):?
    • Better reputation: ?
    • First mover advantages: ?
    • Provide your own examples of firms that compete successfully on this basis.
  • 4. RECOGNISING PATTERNS
    • Advantage comes from understanding and exploiting the emerging competitive market patterns. There is scope for advantage based on:
    • Search/ scanning capabilities
    • Analysis/ interpretation capabilities
    • Risk taking capabilities
    • Implementation capabilities
    • Change management capabilities
    • Ownership of/ access to required complementary assets/ capabilities
    • The ability to do this depends in turn on the effectiveness and integration of the appropriate key business activities and processes (distinctive capabilities/ competencies) which underlie cost competitiveness, quality, innovation, speed to market, network building, and customer intimacy.
    • Production, marketing, logistics, supply chain management, collaboration, branding, quality, market development, product development, and innovation.
    • Which in turn depends on organisational processes and practices such as HRM, information and decision management, and relationship management.
  • 5. Porter’s approach to CA
    • Low cost/ differentiation may indeed be the proximate cause of CA but they cannot be the ultimate source.
    • Low cost positions, superior quality, speed to market, or whatever, must come from something or other the organisation has or does.
    • For example in Ricardo’s time the superior returns (CA) of some farmers indeed came from lower costs which derived ultimately from superior quality (ie more productive) land, a resource that was very hard to make more of!
    • Nowadays Nokia’s or Dell’s superior returns come ultimately from something similar, something (scarce and hard to make more of) which allows them to do things which enable them to offer a better ‘value for money’ proposition to consumers. But what things exactly?
    manecon/options/create
  • 6. Conditions for sustaining a competitive advantage
    • A difference that matters
    • A gap in capabilities
          • Gap in business system
          • Gap in position
          • Regulatory and legal gaps
          • Gap in R&D and implementation
    • Sustainable differentiation
  • 7. SWOT ANALYSIS OF SUZLON(THREATS)
    • Intense competition
    • Over dependence on US
    • Foreign Exchange Risk
    • Technology Risk
    • Decreasing price of crude oil
  • 8. SWOT ANALYSIS OF SUZLON
    • STRENGTH(Company Values)
    • People strength
    • Aggressive Vertical Integration Strategy
    • Strong R&D team
    • Expanding Manufacturing Capabilities
    • Strong Order Book
    • Aggressive Growth
  • 9. SWOT ANALYSIS OF SUZLON(STRENGTH)
    • Cost Reduction
    • Reverse Outsourcing
    • End to End Solution
    • Vertical Integration and Amalgamation
    • Market Leadership in India and Global Presence
    • Growth
    • Integrated Business model
  • 10. SWOT ANALYSIS OF SUZLON(WEAKNESS)
    • Management Structure
    • Capital Intensive
    • Overseas Business
    • Cash Conversion
    • Growth in asset overweighting growth in revenue
  • 11. SWOT ANALYSIS OF SUZLON(OPPURTUNITIES)
    • Environmental and Governmental Initiatives
    • Favorable tax exemptions
    • Untapped offshore market
    • Steady source of demand
  • 12. SWOT ANALYSIS OF SUZLON(THREATS)
    • Intense competition
    • Over dependence on US
    • Foreign Exchange Risk
    • Technology Risk
    • Decreasing price of crude oil
  • 13. Company overview
  • 14. Company overview
  • 15. Timeline & Select Milestones
  • 16. Suzlon group – global presence
  • 17. Acquisition of Hansen Transmission
  • 18. Drivers for growth
    • Three key drivers to go beyond India:
    • 1. Access to technology
    • Technical collaboration with Südwind (1995)  internalizing R&D by 1997/8
    • Formation of AE Rotors in the Netherland• Netherlands
    • Product and process engineering in India
    • Alliances: e.g. joint venture with Elin Generators
    • Maiden venture into the US market (2002/3)
    • European technology platform
    • Experienced European wind energy professionals (engineers, researchers,
    • technicians) as the core to drive Suzlon’s R&D
    • Compete in India
  • 19.
    • 2. Access to people
    • Experienced professionals in e.g. international sales, project management, service
    • management etc. with existing and tested relationships comprising the core team
    • Follow the demand – North America, Europe, Australia, China etc.
    • Creation of Business Units (local organisations, local manufacturing etc.)
    • Follow shift in customer trends (consolidating and becoming bigger more complex
    • higher demands for technology, services, Industrial plans etc.
    • 3. Access to new markets/customers
    • Acquisitions: Repower / Hansen Transmissions
    • enter new markets and access new customers
    • build up experienced and international (but localized) managerial/specialist base
    • local manufacturing to lower transportation costs
    • expand product portfolio
    • access state-of-the-art technology
  • 20. Edge over competitors
  • 21. Proactively addressing challenges at their root
    • Blade cracks
    • Retrofit exercise under way after satisfactory conclusion of RCA and solution
    • Order book slowdown
    • S88 V3, with demonstrable performance, positioned as mainstay for internationalmarket
    • Strong pipeline of potential customers
    • Cost competitiveness, vertical integration and expanded scope of services toprovide edge in tough market conditions
    • Global credit crisis
    • Well-diversified market reach hedges geographical risk
    • Focusing on key markets and customer relationships
    • Current customer profile dominated by utilities and financially sound developers
  • 22. Working capital management
    • Working capital buildup
    • Working capital reduction plan designed in association with AT Kearney
    • Receivables
    • Program management for order fulfillment
    • Improvement in production planning process
    • Improvement in documentation and certification process
    • Inventories
    • Procurement reduction
    • Non- and slow-moving inventory reduction
    • Redistribution of excess between units
    • Mismatch and excess inventory reduction
  • 23. Sustaining competetive advantage
  • 24.