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The Nature and Sources of Competitive Advantage ,[object Object],[object Object],[object Object],[object Object],OUTLINE
The Emergence of Competitive Advantage How does competitive  advantage emerge? ,[object Object],[object Object],[object Object],[object Object],[object Object],Internal sources  of change Resource heterogeneity  among firms means differential  impact Some firms faster  and more effective  in exploiting change Some firms have greater creative and innovative capability
Competitive Advantage from Internally-Generated Change: Strategic Innovation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Sustaining Competitive Advantage Against Imitation REQUIREMENT FOR IMITATION Identification -  Obscure  superior performance -  Deterrence --signal aggressive Incentives for imitation   intentions to imitators -  Pre-emption --exploit all available   investment opportunities - Rely upon multiple sources of  Diagnosis   competitive advantage to create   “ causal ambiguity” - Base competitive advantage upon  Resource acquisition   resources and capabilities that are   immobile  and  difficult to replicate ISOLATING MECHANISM
Competitive Advantage in Different Industry Settings: Trading  Markets  and Production  Markets TRADING  MARKETS ,[object Object],[object Object],[object Object],[object Object],[object Object],None Insider trading Cost minimization Superior diagnosis (e.g. chart analysis) Contrarianism PRODUCTION MARKETS ,[object Object],[object Object],Identify potential barriers to imitation (e.g. deterrence, preemption, causal ambiguity, resource immobility, etc.) & base strategy upon them. Difficult to influence or exploit. MARKET  TYPE SOURCE OF  IMPERFECTION OF COMPETITION OPPORTUNITY FOR COMPETITIVE ADVANTAGE
Sources of Competitive Advantage COST  ADVANTAGE DIFFERENTIATION ADVANTAGE COMPETITIVE ADVANTAGE Similar product at lower cost Price premium from unique product
Porter’s Generic Strategies   SOURCE OF COMPETITIVE ADVANTAGE   Low  cost   Differentiation   Industry-wide   COST   DIFFERENTIATION COMPETITIVE   LEADERSHIP SCOPE   Single Segment   F   O   C   U   S
Features of Cost Leadership and Differentiation Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Ch07

  • 1.
  • 2.
  • 3.
  • 4. Sustaining Competitive Advantage Against Imitation REQUIREMENT FOR IMITATION Identification - Obscure superior performance - Deterrence --signal aggressive Incentives for imitation intentions to imitators - Pre-emption --exploit all available investment opportunities - Rely upon multiple sources of Diagnosis competitive advantage to create “ causal ambiguity” - Base competitive advantage upon Resource acquisition resources and capabilities that are immobile and difficult to replicate ISOLATING MECHANISM
  • 5.
  • 6. Sources of Competitive Advantage COST ADVANTAGE DIFFERENTIATION ADVANTAGE COMPETITIVE ADVANTAGE Similar product at lower cost Price premium from unique product
  • 7. Porter’s Generic Strategies SOURCE OF COMPETITIVE ADVANTAGE Low cost Differentiation Industry-wide COST DIFFERENTIATION COMPETITIVE LEADERSHIP SCOPE Single Segment F O C U S
  • 8.

Editor's Notes

  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  6. 6
  7. 8
  8. 7