This document discusses quality management and competitive advantage at three levels: organizational, process, and individual performer. It defines competitive advantage as a favorable business position and describes two views - resource-based and positional. Competitive advantage requires valuable, rare, imperfectly imitable resources. Factors that drive competitive advantage include innovation, capabilities, strategic focus, demand conditions, and related/supporting industries. Competitive advantage leads to increased profitability and lower cost of capital.

1. QUALITY AND
COMPETITIVE ADVANTAGE
Lesson 2

2. 3 LEVELS OF QUALITY
1. Evaluate and summarize overall quality management at the
organization level
2. Evaluate and summarize quality management at the process level
3. Evaluate and describe quality management at the performer level

3. QUALITY PERFORMANCE
COMMUNICATION PLAN
1. Discuss and include types of reports that will be part of the overall
communications plan
2. Describe who and how often communications will occur for quality
assurance activities
3. Identify final closure process on resolved quality assurance issues.

4. DEFINITION OF ADVANTAGE OF
COMPETITIVE QUALITY
A condition or circumstance that puts a
company in a favorable or superior
business position.

5. RESOURCE-BASED VS. POSITIONAL
VIEW OF ADVANTAGE
Advantage
resource-based view
The firm as its primary
source of advantage
ore competencies,
distinctive competencies,
dynamic capabilities, and
organization evolution.
positional view.
that position within an
industry is the source of
advantage

6. COMPETITIVE ADVANTAGE
Advantage is not nullified through competing firms duplicating the benefits
of that competitive advantage.
To have the potential of sustained competitive advantage, a firm resource
must have four attributes:
1. It must be valuable, in the sense that it exploit opportunities
2. neutralizes threats in a firm's environment.
3. It must be rare among a firm's current and potential competition.
4. It must be imperfectly imitable. This can be due to three reasons:
1) The ability of a firm to obtain a resource is dependent upon unique
historical conditions.
2) 2) The link between the resources possessed by a firm and a firm's
sustained competitive Advantage is causally ambiguous.
3) 3) The resource generating a firm's advantage is socially complex, such as
cultural factors

7. DEMAND-BASED PERSPECTIVE OF
COMPETITIVE ADVANTAGE
the effects of decreasing marginal utility and consumer heterogeneity across market
segments
affect the sustainability of competitive advantage
hrough shifts in consumer willingness to pay

8. THE PRINCIPLE OF COMPETITIVE
ADVANTAGE
inventing
an offering
a real
scarcity in
the world
charging a
price
inventing a
way of
making it
available
cheap
enough to
leave a high
margin
Succes

9. SOURCES OF COMPETITIVE
ADVANTAGESpecialization
With its division of
labour, produces
economies of scale.
Specialization can
overrun its usefulness
Capabilities
Capabilities, intrinsic
capabilities, or
distinctive capabilities
include secrets of value,
established business
networks, brands,
general management
skills, and engineering
competency, innovation

10. INDICATOR OF COMPETITIVE
ADVANTAGE
Profitability
increases
Cost of
capital lowers

11. ELEMENTS OF COMPETITIVE
ADVANTAGE, KAY (2004)
Uniqueness
•unique opportunities and solutions is about imagination, insight, foresight, and the courage to pursue it
Strategic Focus:
•eveloping a longer view of competitive advantage with a combination of purpose, competency, and value proposition.
Strategic Intent/Vision/BHAGs
•Strategic intent challenges and guides the organization to achieve the unachievable
Innovation
•is inventiveness put into profitable practice.
Continual Innovation:
•Making innovation as an on-going process on all fronts.
Democratic Principles
•Broad and diverse participation improves innovation
Strategic Management as a self-improving learning process:
•a learning and self-improvement process for the organization
Dynamic Capabilities
•the capability to produce and utilize new capabilities on a continuous basis

12. COMPETITIVE VS. COMPARATIVE
ADVANTAGE
competitive comparative

13. FRAMEWORK FOR COMPETITIVE
ADVANTAGE
1. the pool of inputs,
2. skills and knowledge they can draw upon,
3. the goals that condition investment,
4. and the pressures on the firm to act

14. ORCES NEEDED TO KEEP
PROGRESSING
Factor conditions: general,
specialized, generic, local, global,
natural resources, labor
Firm strategy, structure, and
rivalry: intensity of competition,
susceptibility to substitutes,
actual rivalry, potential rivalry.
Demand conditions: customer
demands, sophistication,
fickleness
Related and supporting
industries: suppliers, customers,
synergy, dependency

15. REFERENCE COLLECTED FROM
PORTER (1991)
Success requires the choices of:
•A relatively attractive position given industry structure
•The firm's circumstances
•The positions of competitors
•Bringing all the firm's activities into consistency with the chosen
position.

16. DRIVERS OF COMPETITIVE
ADVANTAGE IN AN ACTIVITY
•Scale
•Cumulative learning in the activity
•Linkages between the activities and others
•The ability to share the activity with other business units
•The pattern of capital utilization in the activity over the relevant cycle
•The activity's location
•The timing of investment choices in the activity
•The extent of vertical integration in performing the activity
•Institutional factors affecting how an activity is performed such as government regulations
•The firm's policy choices about how to configure the activity independent of other drivers.
•Solving the longitudinal problem of strategy, getting to an operational understanding of
competitive advantage