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Strategies for competitive advantage
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Ppt competitive advantage

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competitive advantage

Ppt competitive advantage

  1. 1. Competitive <br /> Advantage<br />G2<br />Subject : Global Firm<br />Prof. : Tae Koo Kang<br />G2 : Koo min-woo(200510085)<br /> Song Eun-gwon(200510227)<br /> Kim Jun-won(62338)<br /> Jang Seo-young<br />
  2. 2. Opening Case<br />In 2007, Hyundai motor company <br /> has put a new car on markets.<br /> The new car is “GENESIS”<br /> Genesis’ main consumer target is<br /> high-income grade.<br /> The reason of launching Genesis is that<br /> Hyundai motor will be target a high-grade<br /> car market over the world.<br /> Until 1990s, Hyundai was treated <br /> “ Cheep price, suitable quality “ <br /> In US car market.<br />But, Global car market is more and more intense. <br /> So, Hyundai do not survive existing cost-leadership strategy.<br />
  3. 3. Opening Case<br />In 2007, Hyundai motors has launching High-Class Premium Car “GENESIS”<br /> The Means of GENESIS is that Hyundai will be concentrate the premium <br /> car market and Differentiation is new strategy on Hyundai. <br />
  4. 4. Contents<br />
  5. 5. What is the <br /> Competitive Advantage?<br />Competitive Advantage means<br />Something that places a company <br /> or a person above the competition <br />
  6. 6. What is the <br /> Competitive Advantage?<br />The company will be able to apply to strong point<br />Without being what does not evaluate a property and the ability which the company possesses<br />Competition company comparison will lead and the strong point which is relative could be grasped.<br />The strategy which sees from viewpoint of competitive advantage<br />Continuous a competitive advantage reinforcement and competitive advantage endeavors not to disappear<br />
  7. 7. What is the <br /> Competitive Advantage?<br />The reason of enterprise <br />have a competitive advantage<br />Resource/Performance<br />1. Customer satisfaction and loyalty increase, Increase of profit<br />, Increase of market share<br />-> bring market perfomance<br />2. The product offering which is value in the market<br />->  competitive advantage offering valuable product and service <br />3. various size and scope and profitability of company<br />  ->The competitive advantage makes the base will be able to expand the enterprise which is various.<br />
  8. 8. What is the <br /> Competitive Advantage?<br />Competitive Advantage Cycle.<br /> <br />Step 1. Source of Competitive Advantage<br />          Superior assets<br />          Super Capabilities<br />        Key Success Factor<br />  <br />Step 2. Barriers to Imitation<br />          <br /> higher the barrier to entry to company<br />          When the new business opportunity <br /> coming from the Market which enters <br />first mover advantage<br />       barriers to imitation<br /> <br />
  9. 9. What is the <br /> Competitive Advantage?<br />Step 3. Value proposal form of competitive advantage<br />          Operational Excellence <br />          Product Leadership<br />          Customer Intimacy           <br />       <br />Step 4.Eencroachment prevents of competitive advantage<br />        <br />         New competitive advantage position construction<br />       effort encroachment prevents of competitive advantage  <br />Reinvestment of profit<br />         asset and capability accumulation<br />         resource strengthen of competitive advantage<br />
  10. 10. What is the <br /> Competitive Advantage?<br />Cost advantage<br />Similar product<br />At lower cost<br />Competitive Advantage<br />Higher price<br />For unique product<br />Differentiation<br />Advantage<br />
  11. 11. What is the <br /> Competitive Advantage?<br />A Model of Competitive advantage<br />Resources<br />Cost advantage<br />Or<br />Differentiation advantage<br />Distinctive<br />Competencies<br />Value<br />Creation<br />Capabilities<br />
  12. 12. What is the <br /> Competitive Advantage?<br />Main aspects of five forces analysis<br />1. the rivalry between existing sellers in the market<br />2. the potential threat of the entry of new competitors<br />3. the threat of substitute products becoming available<br /> the market<br />4. the bargaining power of consumer<br />5. the bargaining power of suppliers<br />
  13. 13. What is the <br /> Competitive Advantage?<br />Main aspects of <br />five forces analysis<br />
  14. 14. What is the <br /> Competitive Advantage?<br />Competitive advantage strategies<br />
  15. 15. What is the <br /> Competitive Advantage?<br />Cost Leadership (Low Cost Strategy)<br /> cost Leadership mean that produce goods level of equal more in expensive<br />2. differentiation (Differentiation Strategy)<br /> Differentiation is that provide inventive value can improve of perceive valued of consumers toward product(or service) in the market.<br />3. Focus Cost Leadership / Differentiation:<br /> When competition's range is narrow, in other words when target on specific customer segment will be focused cheap price and differentiation strategy.<br />
  16. 16. 2. Sorce of Global <br /> Competitive Advantage<br />
  17. 17. 2. Sorce of Global <br /> Competitive Advantage<br />Adapting to Local Market Differences<br />Companies must respond to the inevitable heterogeneity they will encounter in these markets. <br />Differences in language, culture, income levels, customer preferences, and distribution systems.<br />
  18. 18. 2. Sorce of Global <br /> Competitive Advantage<br />(a) Increased market share.<br />(b) Improved price realization.<br />Offering standard products and services across countries reduces the boundaries of the served market to only those customers whose needs are uniform across countries.<br />- Tailoring products and services to the preferences of local customers enhances the value delivered to them.<br />- A portion of this increased value should translate into higher price realization for the firm <br />
  19. 19. 2. Sorce of Global <br /> Competitive Advantage<br />© Neutralizing local competitors.<br />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.<br />
  20. 20. 2. Sorce of Global <br /> Competitive Advantage<br />Exploiting Economies of Global Scale <br />Building a global presence automatically expands a company's scale of operations, giving it larger revenues and a larger asset base.<br />Potential benefits of economies of scale in various ways: spreading fixed costs, reducing capital and operating costs, pooling purchasing power, and creating critical mass.<br />
  21. 21. 2. Sorce of Global <br /> Competitive Advantage<br />
  22. 22. 2. Sorce of Global <br /> Competitive Advantage<br />Exploiting Economies of Global Scope <br />Global scope refers to the multiplicity of regions and countries in which a company markets its products and services.<br />
  23. 23. 2. Sorce of Global <br /> Competitive Advantage<br />Tapping the Optimal Locations for Activities and resources <br />A firm that can exploit these intercountry differences better than its competitors has the potential to create significant proprietary advantage<br />
  24. 24. 2. Sorce of Global <br /> Competitive Advantage<br />Maximizing Knowledge Transfer Across Locations <br />(a) Faster product and process innovation.<br />(b) Lower cost innovation.<br />- A second by-product of not reinventing the wheel is considerable savings in the costs of innovation.<br />(c) Reduced risk of competitive preemption.<br />- 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.<br />
  25. 25. 3. Competitive Advantage<br /> By Porter<br />How a firm can actually<br />create and sustain a <br />competitive advantage<br />in its industry?<br />
  26. 26. 3. Competitive Advantage<br /> By Porter<br />Competitive Advantage Definition<br />“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.”<br /> -- Michael Porter<br />
  27. 27. 3. Competitive Advantage<br /> By Porter<br />Two Basic Types<br />Both can be more broadly approached or narrow, which results in the third viable competitive strategy<br />
  28. 28. 3. Competitive Advantage<br /> By Porter<br />Approach 1 to Competitive advantage: Cost leadership<br /><ul><li> A firm sets out to become the low cost producer in its industry.
  29. 29. 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.
  30. 30. Note: if more than one company aim for cost leadership, usually this is disastrous.
  31. 31. Often achieved by economies of scale
  32. 32. Examples of Cost Leadership: Nisson; Tesco; Dell</li></li></ul><li>3. Competitive Advantage<br /> By Porter<br />Approach 1 to Competitive advantage: Cost leadership<br />Steps in Strategic Cost Analysis<br />STEP1. Identify the appropriate value chain and assign <br /> costs and assets to it.<br />STEP2. Diagnose the cost drivers of each value activity and <br /> how they interact.<br />STEP3. Identify competitor value chains, and determine the relative <br /> cost of competitors and the sources of cost differences.<br />STEP4. Develop a strategy to lower relative cost position <br /> through controlling cost drivers or reconfiguring <br /> the value chain and/or downstream value.<br />
  33. 33. 3. Competitive Advantage<br /> By Porter<br />Competitive advantage model 2: Differentiation<br /><ul><li> a firm seeks to be unique in it’s industry along some dimensions that are widely valued by buyers.
  34. 34. 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.</li></ul>- Area’s of differentiation can be: product, distribution, sales, marketing, service, image, etc.<br />
  35. 35. 3. Competitive Advantage<br /> By Porter<br />Competitive advantage model 2: Differentiation<br />Steps in Differentiation<br />Determine who the real buyer is <br />Identify the buyer’s value chain and the firm’s impact on it<br />Determine ranked buyer purchasing criteria<br />Assess the existing and potential sources of uniqueness in a firm’s<br /> value chain<br />Identify the cost of existing and potential sources of differentiation<br />Choose the configuration of value activities that creates the most valuable differentiation for the buyer relative to cost of differentiating<br />
  36. 36. 3. Competitive Advantage<br /> By Porter<br />Competitive advantage 3: Focus<br />- a firm sets out to be best in a segment or group of segments.<br />- 2 variants: cost focus and differentiation focus.<br />
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