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Creating Competitive Advantage
- 1. Creating Competitive Advantage Strategy Basedon the works of Michael E. Porter By Ian Simpson
- 2. The Situation Schoolstrying to be all things to all customers Little or no competitive advantage
- 3. Perform tasks betterand faster Fewer required inputs Minimizing defects Absolutely necessary for strategy Examples Operational Effectiveness
- 4. Operational Effectiveness 2 NOTstrategy Easy to imitate Competitive Convergence
- 5. Definition Strategy is thecreation of a unique and valuable position, involving a different set of activities. Strategy
- 6. Strategy Strategic Position Servingfew needs of many customers Serving broad needs of a few customers Serving broad needs of many customers in a narrow market
- 7. Trade-offs Essence of Strategy Choosingwhat not to do! Strategy
- 8. Activities Definition Basic units ofCompetitive Advantage Examples New Products
- 9. FIT is theway a companies activities interact and reinforce each other Strategy requires FIT among a companies activities Very hard for competitors to copy a good FIT FIT
- 10. FIT – TheQueens School Model: 1.Strategic Position – Serving the broad needs of few customers 2.Target Customers Busy High-End Professionals (Medical Bias) 3.Activities Private Classroom lessons Private Online video lessons Online Learning Platform Central 'HUB' Administration Software System 4. Queens School operates 3 schools
- 11. 1 X 1 OnlineVideo Lesson 1 X 1 Corporate Courses 1 X 1 Classroom Lesson Happy Hour The Edge [Engine Room] Video Sharing And Admin SIMSTAT Teaching System Medical Bias Target High-End Profession als
- 12. First Expansion: Deepen StrategicPosition Uniqueness of your Business Second Expansion: Separate “stand-alone” unit Examples FIT – The Queens School Model:
- 13. Waseda/Queens Kids School Original Name Logo Homepage Image Strategic- Position Doesn't blur the original Queens Strategic Position Curriculum Staff Marketing Buildings Kid's school Administration Link to Queens Engine Room Queens English School School 1 School 2 ( in city A ) ( in city B ) Japanese Teacher Native Teacher Japanese Teacher Native Teacher Native Teacher Native Teacher Japanese Teacher Japanese Teacher Week 1 Week 3Week 2 Week 4 Waseda Juku "FIT" Drives both Competitive Advantage and Sustainability "SHARE" Workload & Costs
- 14. Conclusion Do you havea Strategy? 1. Which of our products are the most distinctive? 2. Which are the most profitable? 3. Which of our students/clients are most satisfied? 4. Which of the products in our value chain are the most different and effective? 5. What is our Core Competence?
- 15. 1. Strategy Vision 2.Unique Position 3. Improve “Operational Efficiency” (OE) 4. Decide 'Activities' 5. Trade-offs – What NOT to do 6. Create FIT 7. Deepen Unique Position Quick Glance List for creating a strategic position
- 16. Quote – MichaelE. Porter A companies choice of a new position must be driven by the ability to find new trade-offs and leverage a new system of complimentary activities into sustainable advantage.
Editor's Notes
- #3 Do you have unique position within the market ? – Do you have a Strategy ?????? Many business don’t have a strategy , they rely on Operational Effectiveness to try and stay ahead of rivals !
- #4 Examples of OE - -- Good quality, easy to navigate HP , including online functions like booking a trial lesson, receiving info. -- Schools communication system between staff and students – in-house email –Viber-Line etc …. -- teacher recruitment and training/ assessment – smooth -- system for ordering stock – bulk buying – discounts -- efffective timetableing -- office filing system -- monthly financial calculations – salaries -- new student - ease of induction and placement -- student surveys and continual improvement and “best practice”
- #5 Stay ahead of imitation by running faster and faster !!!! Easy to imitate / Competitive Convergence -- - Japanese companies of the 70` & 80`s – leading the world in OE -- - lead to CV and low profits. -- The only person who gains is the client/student, because of increased customer service and low prices !! -- Nowadays companies are having to think more about strategy - Toa & Arai – Forging –competing with China- Taiwan- Malaysia – by making unique machine-less products ..etc.
- #6 That is doing different activities or doing similar activities in a different way, from your rivals.
- #7 These 3 positions are not mutually exclusive , but sometimes overlap 1- Variety based position - eg - an Exam school, pronunciation school, Kumon ? 2- Needs based position – eg - serving a particular segment of client ( medical – Doctors jokes !!) or kind of service ( study abroad ). 3 – Access based – eg – the countyside school – adv.- lower costs because of locality, rents, advertising, less competition, Deciding on which ? - Incumbunts- cost of rebranding, / adv. To new Entrants –seeing a seded or new position. -- its diffucult to provide a better and greater value service than a specialist. – because of over stretching your resources.
- #8 -Trade Offs are essential for a successful strategy - it basically means more of one thing neccesitates a need for less of another. You cant hope to do everything without high costs and overheads. Some activities are not mutually compatitble. Eg - Trying to do an IELTS-TOIEC course on the same T/T as a coffee & chat lesson and a pronunciation division may blur your strategic position in the eye of the customer,, activities NOT compatable ! & problem with the need for specialist teachers. -- lack of trade offs / danger of Straddling /
- #9 -- Creating unique and compatible activities are the basic units of CA. -- EXAMPLES of activities could include – type of lesson focus, original curriculum, course structure, pricing structure( low cost or differentiator), packages etc. New products - music, videos , ( combined with original texts) / online courses / The Edge – MY new product. – combining these activities to make unique courses and programs add to CA.
- #10 Its hard to copy one part of a system, but very almost impossible to copy a complete interlocking system. So this can be a great “barrier to entry” , because of cost and complexity.
- #12 1- This diagram aims to show how the strategic Activities selected by Queens Education are mutually compatable and therefore create a strategic advantage over rivals. 2 – 3 main lesson types + 1 expansion ( later )! 3 – And , 3 other compatable activities that strengthen the FIT and make it harder for rivals to copy. 4- Lets talk about the FIT from the inside out. 5 – To give you an example of how it might work in reality. A students signing up for the PRIVATE LESSON will get a package that includes ……………
- #13 The first expansion was the HH lesson, introduced to serve the needs of the local community. ( providing a benefit to the community – social responsibility – but possible to do because of the existing infrastructure and FIT) -- see previous slide – HH -- see next slide to see the second and different kind of expansion.
- #14 -- The activities are the :- course structure, unique curriculum, link to JHS 1- balance of communication to grammar, shuttle bus service, combination packages with Juku subjects. -- This is a tight FIT !!
- #15 -- ASK YOURSELF ? -- if you’re an existing school - ask yourself. Are we still on track, focused. What was the vision of the founder ?