12. Resources and capabilities CAPABILITIES More likely to be unobservable & difficult to trade The ability of a firm to accomplish tasks that are linked to higher economic performance by increasing value, decreasing cost or both Should deliver customers a greater value proposition Should help build Barriers to entry either by raising the actual costs of physical plant or increasing brand loyalty among customers Superior Economic Contribution Sustainable Market Position COMPETITIVE ADVANTAGE Resources can be either observable and tradable or unobservable (tacit) and harder to trade: Resources represent an asset that contributes to a firm’s market position by increasing value or lowering cost
13.
14.
15. Building Blocks of Competitive Advantage SUPERIOR EFFICIENCY SUPERIOR CUSTOMER RESPONSIVENESS SUPERIOR QUALITY SUPERIOR INNOVATION COMPETITIVE ADVANTAGE THE INTERNAL VALUE CHAIN THE MANTRA OF COMPETITIVE ADVANTAGE EFFICIENCY QUALITY INNOVATION CUSTOMER RESPONSIVENESS
16. Building Blocks of Competitive Advantage Strengths VALUE CHAIN Weaknesses OUTPUTS INPUTS EFFICIENCY = OUTPUTS INPUTS FINANCIAL EFFICIENCY = UNITS per Rupee OPERATIONAL EFFICIENCY = UNITS per UNIT EFFICIENCY RELIABILITY , CONSISTENCY, and EXCELLENCE Quality is what the stakeholder says it is. QUALITY
17. Building Blocks of Competitive Advantage CUSTOMER RESPONSIVENESS NEW PRODUCTS and SERVICES NEW PROCESSES NEW TECHNOLOGIES NEW STRATEGIES RESPONSIVENESS (more than timeliness) SATISFYING NEEDS and DESIRES SERVICE Delivering value!!! INNOVATION