The document discusses Michael Porter's concepts of competitive advantage and value chain analysis. It explains that firms can achieve competitive advantage through cost leadership or differentiation. Value chain analysis involves identifying activities that contribute to these strategies and analyzing the sources of competitive advantage. Primary and support activities are discussed along with cost drivers and how to control costs to achieve a cost advantage. Differentiation strategies are also covered, including identifying sources of differentiation and determining how to create buyer value through differentiation.

1. Competitive Advantage Author: Michael Porter Instructor: Wesley Shu

2. How a firm can actually create and sustain a competitive advantage in its industry

5. Value Chain

8. Primary Activity Focus by Industry X Marketing & Sales X Xerox Corporate Lending NA X Restaurant X X Distributor Service Outbound Logistics Operations Inbound Logistics Industry

15. Competitive Strategies Differentiation Focus Cost Focus Narrow Target Differentiation Cost Leadership Broad Target Competitive Scope Differentiation Lower Cost Competitive Advantage

17. Operating Cost Assignment

18. Asset Assignment

24. Identify Cost Drivers

27. How to Achieve Cost Advantage

28. Analyze Cost Advantage

35. Identify Sources of Differentiation

42. Discussion: Red Ocean to Blue Ocean