Competitive Advantage and Learning


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  • Home exercise for next week: answer to either: SMD Paper December 2004 Q2, or SMD Paper June 2005 Q2
  • Competitive Advantage and Learning

    1. 1. Sources of competitive advantage <ul><li>Superior product benefit </li></ul><ul><li>Perceived advantage (through communication/branding) </li></ul><ul><li>Low cost operations </li></ul><ul><li>Legal advantage (e.g. patents, copyrights) </li></ul><ul><li>Superior contacts </li></ul><ul><li>Superior knowledge (of customers/markets, science/technology) </li></ul><ul><li>Scale advantages </li></ul><ul><li>Offensive attitudes (competitive toughness & determination to win) </li></ul><ul><li>Hugh Davidson (1987) Offensive Marketing </li></ul>
    2. 2. Competitive advantage and learning <ul><li>Competitiveness arises from understanding customer needs in a manner that allows superior value to be provided </li></ul><ul><li>By being aware of both existing and potential competitor activities, firms are able to take appropriate action to respond to opportunities and threats </li></ul><ul><li>Firms that develop the learning capability to achieve this are able to reshape themselves and so sustain their competitiveness </li></ul>Doole & Lowe
    3. 3. Competitive advantage and learning <ul><li>Minimising the incidence and potential impact of serious environmental disturbances, through advance acquisition of knowledge </li></ul><ul><li>Increased flexibility enables firms to develop rapid company responses to exploit emerging opportunities/extinguish threats </li></ul>Morgan et al. (1998)
    4. 4. A learning organisation is… …an organisation skilled at creating, acquiring and transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights The Learning Organisation
    5. 5. Organisational knowledge <ul><li>Explicit knowledge </li></ul><ul><ul><li>v. </li></ul></ul><ul><li>Tacit knowledge </li></ul>
    6. 6. Organisational knowledge <ul><li>Explicit knowledge </li></ul><ul><li>Knowledge that can be displayed as numbers and words and can be shared easily </li></ul><ul><li>Knowledge contained within some sort of artefact, such as a process, document or video, that has typically been created with the goal of communicating with another person </li></ul><ul><li>An intellectual property of the organisation </li></ul><ul><li>Developed through the signal learning processes? </li></ul>
    7. 7. Organisational knowledge <ul><li>Tacit knowledge </li></ul><ul><li>More ambiguous than explicit knowledge </li></ul><ul><li>Can be described as unarticulated knowledge, hard to formalise and difficult to express </li></ul><ul><li>Developed by an individual’s or an organisation’s insights, beliefs, values and perspectives developed over time </li></ul><ul><li>What the knower knows that is not obvious to others and is derived from experience. </li></ul><ul><li>More akin to 3R learning? </li></ul>
    8. 8. Organisational learning <ul><li>Signal learning </li></ul><ul><ul><li>v. </li></ul></ul><ul><li>3R learning </li></ul>
    9. 9. Signal learning <ul><li>Signal learning is concerned with monitoring and maintaining a position in global markets </li></ul><ul><li>Concerned with the traditional activities of the operations of a company </li></ul><ul><li>Companies need to have an understanding of the indicators they need to monitor in their markets so the right signals are picked up </li></ul>
    10. 10. 3‘R’ Learning <ul><li>Reflect </li></ul><ul><li>Re-evaluate </li></ul><ul><li>Respond </li></ul><ul><li>3R learning occurs in anticipation of, or in response to critical events occurring in the market </li></ul><ul><li>Firms who successfully reinvent themselves undergo 3R learning in reflecting on the demise of traditional markets </li></ul>
    11. 11. 3‘R’ Learning <ul><li>Companies committed to 3R learning: </li></ul><ul><li>Are more likely to have developed internal competence to build and market a technological breakthrough. </li></ul><ul><li>Have the knowledge and ability to understand and anticipate latent needs and the ability to spot opportunities created by emerging market demand. </li></ul><ul><li>Are likely to have a greater innovation capability than competitors and be prepared to learn from failure as well as success </li></ul>
    12. 12. Developing 3‘R’ learning <ul><li>Question existing product, service, process and systems and examine how they contribute strategically to the future marketplace </li></ul><ul><li>Learn how to discard things done previously in order to create the capacity to make step changes or even quantum leaps - organisational un-learning </li></ul><ul><li>Create new knowledge through radical changes </li></ul><ul><li>Think creatively rather than following predictable traditional paths </li></ul>Wang and Ahmed (2003)
    13. 13. Developing 3‘R’ learning <ul><li>Breakthrough innovations sometimes need unexpected leaps of creativity and insight </li></ul><ul><li>Build competencies within the organisation and in the marketplace to undermine the innovations of competitors </li></ul><ul><li>Develop creative quality processes to help the company deliver value innovations in the marketplace </li></ul>Wang and Ahmed (2003)
    14. 14. Single & double-loop learning Organisational learning
    15. 15. Past barriers and future obstacles Doole & Lowe The Learning Organisation
    16. 16. The need for managers to ‘learn to forget’ <ul><li>Competing for industry foresight by identifying how the market will or can be encouraged to develop </li></ul><ul><li>Developing the skills and structures within the firm that will be needed in order to compete in the new environment </li></ul><ul><li>Ensuring the organisation’s resources are focused, developed and exploited to the full </li></ul><ul><li>Developing a clear understanding of the core competencies the firm has now and will need in the future </li></ul>Doole & Lowe
    17. 17. Organisational values for effective organisational learning <ul><li>Commitment to learning </li></ul><ul><li>Open mindedness </li></ul><ul><li>Shared vision </li></ul><ul><li>Intra-organisational knowledge sharing </li></ul>
    18. 18. Knowledge Management <ul><li>“ A vehicle to systematically and routinely help individuals, groups, teams and organisations to: </li></ul><ul><li>Learn what the individual knows </li></ul><ul><li>Learn what other know (e.g. individuals and teams) </li></ul><ul><li>Learn what the organisation knows </li></ul><ul><li>Learn what you need to learn </li></ul><ul><li>Organise and disseminate these learnings effectively and simply </li></ul><ul><li>Apply these learnings to new endeavours </li></ul><ul><li>This is simple and clear as a statement, but is difficult to accomplish. Although managing knowledge has been a human task for more than 5 million years, it has only recently gained attention as a business discipline.” </li></ul><ul><li>Gorelick, C., Milton, N., and April, K. (2004) Performance Through Learning: Knowledge Management in Practice </li></ul>