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BFBM(4-2016) Competitive advantage

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၂၀၁၆ ခုႏွစ္၊ွွ ေမ (၈) ရက္ေန႔ (တနဂၤေႏြေန႔) မွာ က်င္းပျပဳလပ္ခဲ့တဲ့ Better Future Better Myanmar - 2016 (Myanmar Miracle) စီးပြားေရးဆိုင္ရာ အခမဲ့ေဟာေျပာပြဲမ်ားရဲ႕ တတိယေျမာက္ေဟာေျပာပြဲမွာ ပါေမာကၡ ေဒါက္တာေအာင္ထြန္းသက္ Competitive Advantage ေခါင္းစဥ္နဲ႔ ေဟာေျပာခဲ့တဲ့ PowerPoint Slide ျဖစ္ပါတယ္။

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BFBM(4-2016) Competitive advantage

  1. 1. Competitive Advantage Prof.Dr.Aung Tun Thet
  2. 2. Competitive Advantage Prof.Dr.Aung Tun Thet
  3. 3. Competitive Advantage • Being different • Choosing to perform activities differently • Perform different activities than rivals • Deliver unique value
  4. 4. Diamond Model Firm Strategy, Structure and Rivalry Demand Conditions Factor Conditions Related and Supporting Industries Chance Government
  5. 5. 4 Building Blocks of Competitive Advantage • Low Cost • Differentiation Competitive Advantage Superior Quality Superior Customer Responsiveness Superior Innovation Superior Efficiency
  6. 6. 5 Forces That Shape Industry Competition Rivalry Among Existing Competitors Threat of New Entrants Threat of Substitute Products Bargaining Power of Suppliers Bargaining Power of Buyers
  7. 7. Competitive Advantage Firm Competitors New Market Entrants Suppliers Customers Substitute Products
  8. 8. Competitive Advantage Cost Advantage Differentiation Advantage (Similar products at lower price) (Price premium from unique product)
  9. 9. Generic Strategies Competitive Advantage Low Cost Higher Cost Competitive Scope Broad Narrow Cost Focus Cost Leadership Differentiation Differentiation Focus
  10. 10. Sustainable Competitive Advantage
  11. 11. 19th Century • “If a man make a better mouse-trap than his neighbour, • the world will make a beaten path to his door.”
  12. 12. 21st Century • Manage for uniqueness • Develop distinctive competence • Create competitive advantage
  13. 13. Three competitive hot spots 1. Product innovation: Competitors secure detailed information on 70% of all new products within year of development; Patenting do not deter imitation; Imitation costs 1/3rd less than innovation and 1/3rd quicker 2. Production: New processes harder to protect; 60% to 90% of all “learning” diffuse to competitors 3. Marketing: Rivals react by adjusting marketing mix
  14. 14. Sustainable Competitive Advantage • Two key questions: 1. Which advantages sustainable? 2. Why?
  15. 15. Sustainable Competitive Advantage • Three categories 1. Size in targeted market 2. Superior access to resources or customers 3. Restrictions on competitors’ options
  16. 16. 1. Benefits of Size
  17. 17. Size Advantage • Markets finite • Competitors resign themselves to remaining smaller • Fear if they matched leader’s size • Supply exceed demand to make market unprofitable for everyone
  18. 18. Size Advantage • Commitment to being large - making durable, irreversible investments • Exploit opportunities • Preempt competitors • “First-movers”
  19. 19. Size Advantage • Three bases: 1. Scale 2. Experience 3. Scope
  20. 20. Scale economies • National, regional, or local level • Not confined to manufacturing • Wal-Mart
  21. 21. Experience effects • Size over time • Not at particular point in time • Irreversible, market-specific investment
  22. 22. Scope Economies • Milacron - largest U.S. machine tool manufacturer • R&D • Sales and service networks • Robotics • Activities coordinated • Contributions from one business to success of another • Hard to implement
  23. 23. 2. Access Advantages
  24. 24. Preferred Access • Resources or customers • Sustainable advantage independent of size
  25. 25. Preferred Access • Two conditions: • Secured under better terms than competitors • Enforceable over long run
  26. 26. Enforceability • Ownership • Binding contracts • Self-enforcing mechanisms
  27. 27. Know-how • Cumulative investments in R&D • Hidden - what rivals don’t see • Kept secret to yield advantage
  28. 28. Inputs • Supply bounded • Strictly limited supply
  29. 29. Markets • Mirror image of preferred access to inputs • Self-enforcing mechanisms - reputation, relationships, switching costs, and product complementarities • Sensitive to customer preferences
  30. 30. 3. Exercising Options
  31. 31. Sustainability of Advantage • Not on size or access • Competitors’ options differ fundamental • Inability to imitate
  32. 32. Sustainability of Advantage • Rivals frozen into current positions: • Public policy • Defense • Response lags
  33. 33. Guidelines for Strategy • 1. Managers cannot ignore contestable advantages • 2. Distinction between contestable and sustainable advantages matter of degree • 3. Not all industries offer equal opportunities to sustain advantage • 4. Blessed with competitors with restricted menu of options or preempt them
  34. 34. Guidelines for Strategy • Two things 1. Commitment to competing particular way 2. Flexibility to compete effectively in other ways
  35. 35. People Are Competitive Advantage
  36. 36. Best way to get out in front • High tech development • Access to financial assets • R & D • …..
  37. 37. Best way to get out in front • Increasingly ineffective • Technologies merge • Regulations relaxed • Powerful strategic alliances
  38. 38. Savvy fast-growing companies • Achieve competitive advantage through own people and organizational capabilities • Create value: • Differ from competitors’ approaches • Not easily copied
  39. 39. Competitors • Obtain capital and technology • Match creative pricing strategies • Difficult to recreate culture, value system, operating principles, leadership style and management philosophy • People foundation of organizational capability
  40. 40. Organizational Capability • Anticipate and adapt to changing customer needs and marketplace forces • Through people, culture, internal structures, policies and practices
  41. 41. Analogy • Tree • Flowers, leaves and fruit - value it delivers • Roots represent organizational capability
  42. 42. Organizational Capability • Hidden below surface • Contributes to success • Cannot be easily copied • Premier competitive advantage
  43. 43. Organizational Capability • Intellectual capital • Minds and hearts of people – not buildings, tools, financial capital • Differentiate and grow business – beat competition
  44. 44. FINANCIAL REWARDS Rapid Growth Profits CUSTOMER BENEFITS Customer focused decision making Customer satisfaction Innovative products OPERATIONAL PERSPECTIVES roduct development Quick to market ORGANIZATIONAL CAPABILITY Innovative HR practices Team culture Effective Communication Common ways of working Employer of choice
  45. 45. Culture for Excellence
  46. 46. Employee Involvement • Authority . Information/Communication • Company Knowledge . Recognition/Rewards • Individual Knowledge . Rewards/Performance COMPETITIVE ADVANTAGE • Employee Morale • Turnover • Customer Satisfaction • Financial Performance Quality of Work/ Life • Balance • Work Load • Diversity • Job Security • Resources Service Quality • Top Management Commitment • Quality emphasis • Improvement/ Innovation • Teamwork
  47. 47. Employee Involvement • Make decisions and contribute (Authority) • Understand business and how organization operates (Company Knowledge) • Learning and development opportunities (Individual Knowledge)
  48. 48. Employee Involvement • Open and ongoing communication between management and employees (Information & Communication) • Recognition and rewards for contributions (Recognition & Rewards) • Link between rewards and performance (Rewards- Performance Link)
  49. 49. Quality of Work Life • Employees receive both personal and work-related support • Employees: • Balance work and personal demands effectively (Balance) • Challenging but reasonable work loads (Work Load)
  50. 50. Quality of Work Life • Treated fairly regardless of demographic differences - gender and race (Diversity) • Reasonable level of job security (Job Security) • Tools, materials and equipment to perform jobs effectively (Resources)
  51. 51. Thank You!

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