This document discusses internal analysis and competitive advantage. It defines competitive advantage as when a company's profit rate is higher than the industry average. This can be achieved through low costs or product differentiation. The document outlines several generic building blocks of competitive advantage, including efficiency, quality, innovation, and customer responsiveness. It also discusses the value chain and how business functions like R&D, production, marketing, and service can create value. Distinctive competencies, resources, and capabilities are identified as the root of competitive advantage. The role of strategy and luck in achieving competitive advantage is also mentioned.
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Services marketing is a sub-field of marketing, The promotion of economic activities offered by a business to its clients. Service marketing might include the process of selling telecommunications, health treatment, financial, hospitality, car rental, air travel, and professional services.
Scaling is the process of measuring or ordering entities with respect to quantitative attributes or traits. With comparative scaling, the items are directly compared with each other .In non -comparative scaling each item is scaled independently of the others.
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Services marketing is a sub-field of marketing, The promotion of economic activities offered by a business to its clients. Service marketing might include the process of selling telecommunications, health treatment, financial, hospitality, car rental, air travel, and professional services.
Scaling is the process of measuring or ordering entities with respect to quantitative attributes or traits. With comparative scaling, the items are directly compared with each other .In non -comparative scaling each item is scaled independently of the others.
Clare attends Yanco Agricultural High School. She comes off a property between Tottenham and Tullamore in the centre of NSW. Her family owns 4500 acres in NSW and another 240 000 acres in Southern Queensland between Cunnamulla and St George.
This is her story
identificaรงรฃo do negรณcio a ser estudado.
Venda de pรฃes a domicรญlio utilizando-se de motocicletas para a entrega
Descriรงรฃo e Anรกlise do negรณcio.
empreender num novo negรณcio
Operations strategy for MBA, CA, CMA, B COM, M COM Bibek Prajapati
ย
Product and Service Management. What good or service do we offer and what is the design of it?
Operations and Supply Chain Management. ...
Inventory Management. ...
Forecasting and Capacity Planning. ...
Operations Scheduling. ...
Management of Quality. ...
Facilities Planning and Management.Many historical milestones have shaped OM. Some of these are the Industrial Revolution, scientific management, the human relations movement, management science, and the computer age
OM is highly important function in todayโs dynamic business environment. Among the trends with significant impact are just-in-time, TQM, reengineering, flexibility, time-based competition, SCM, global marketplace, and environmental issues
OM works closely with all other business functions
The operations strategy focuses on developing specific capabilities called competitive priorities.
There are four categories of competitive priorities: cost, quality, time, and flexibility
Technology can be sued by companies to gain a competitive advantage and should be acquired to support the companyโs chosen competitive priorities
Productivity is a measure that indicates how efficiently an organization is using its resources
Productivity is computed as the ratio or organizational outputs divided by inputs
CHAPTER 3Assessing the Internal Environment of the FirmCopyrEstelaJeffery653
ย
CHAPTER 3
Assessing the Internal Environment of the Firm
Copyright Anatoli Styf/Shutterstock
1
Learning Objectives
After reading this chapter, you should have a good understanding of:
3-1 The primary and support activities of a firmโs value chain.
3-2 How value-chain analysis can help managers create value by investigating relationships among activities within the firm and between the firm and its customers and suppliers.
3-3 The resource-based view of the firm and the different types of tangible and intangible resources, as well as organizational capabilities.
3-4 The four criteria that a firmโs resources must possess to maintain a sustainable advantage and how value created can be appropriated by employees and managers.
3-5 The usefulness of financial ratio analysis, its inherent limitations, and how to make meaningful comparisons of performance across firms.
3-6 The value of the โbalanced scorecardโ in recognizing how the interests of a variety of stakeholders can be interrelated.
ยฉMcGraw-Hill Education.
2
The Importance of the Internal Environment
Consider. . .
Which activities must a firm effectively manage and integrate in order to attain competitive advantages in the marketplace?
Which resources and capabilities must a firm create and nurture in order to sustain a competitive advantage?
ยฉMcGraw-Hill Education.
What if two firms compete in the same industry and both have many strengths in a variety of functional areas: marketing, operations, logistics, etc.? However, one of these firms outperforms the other by a wide margin over a long period of time. How can this be? The value-creating activities that the firm manages well, and the bundles of resources and capabilities that the firm has created and nurtured over time are crucial to answering these questions.
3
Value-Chain Analysis
Value-chain analysis looks at the sequential process of value-creating activities.
Value is the amount buyers are willing to pay for what a firm provides.
How is value created within the organization?
How is value created for other organizations in the overall supply chain or distribution channel?
The value received must exceed the costs of production.
ยฉMcGraw-Hill Education.
SWOT is a good starting point, but it doesnโt give enough guidance regarding the specific action steps needed to enact strategic change. For instance, a firm may have a capability that is a strength, but that, by itself, cannot create or sustain competitive advantage. Itโs too easy to become preoccupied with a single dimension or element of what is, essentially, a moving targetโฆMORE analysis may be necessary, which is where the value chain comes in. Value-chain analysis = a strategic analysis of an organization that uses value-creating activities. Value is the amount that buyers are willing to pay for what a firm provides them and is measured by total revenue, a reflection of the price a firmโs product commands, and the quantity it can sell. A firm is profitabl ...
Strategic Information Systems for Competitive Advantage-1.pptsantoshsahu622005
ย
As the name suggests, there are two aspects to this business strategy. The โFocusโ refers to when a company focuses on a niche market, either by industry or geography, and becomes the expert in delivering for that industry.
Internal analysis, the six fundamental questions answered in analyzing the internal environmental of business.How well the companyโs present strategy working,Discuss the difference between corporate level strategy and business level strategy,the four building blocks and their impact on overall company strategy,Define horizontal and vertical integration with example,explain the five major competitive strategy?
It is the type of data defined in Statistics & it can also used in the process of knowledge discovery or pattern searching such as data mining, web data mining which is important for the purpose of decision making. The presentation focus on the type of data known as four level of measurement in Statistics.
Outline
1.What is Statistics ?
2.Type of Statistics
3.Type of Sampling
4.Four Level of Measurement
5.Describing Data: Frequency Distributions and Graphic Presentation
Simple Random Sample
all members of the population has the same chance of being selected for a sample.
Systematic Sample
A random starting point is selected, then every k item is selected for the sample.
Stratified Sample
Population is divided into several groups or strata and then a sample is selected from each stratum.
Cluster Sample
Primary units and then samples are drawn from the primary unit.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
ย
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
ย
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.๐คฏ
We will dig deeper into:
1. How to capture video testimonials that convert from your audience ๐ฅ
2. How to leverage your testimonials to boost your sales ๐ฒ
3. How you can capture more CRM data to understand your audience better through video testimonials. ๐
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
ย
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Buy Verified PayPal Account | Buy Google 5 Star Reviewsusawebmarket
ย
Buy Verified PayPal Account
Looking to buy verified PayPal accounts? Discover 7 expert tips for safely purchasing a verified PayPal account in 2024. Ensure security and reliability for your transactions.
PayPal Services Features-
๐ข Email Access
๐ข Bank Added
๐ข Card Verified
๐ข Full SSN Provided
๐ข Phone Number Access
๐ข Driving License Copy
๐ข Fasted Delivery
Client Satisfaction is Our First priority. Our services is very appropriate to buy. We assume that the first-rate way to purchase our offerings is to order on the website. If you have any worry in our cooperation usually You can order us on Skype or Telegram.
24/7 Hours Reply/Please Contact
usawebmarketEmail: support@usawebmarket.com
Skype: usawebmarket
Telegram: @usawebmarket
WhatsApp: +1โช(218) 203-5951โฌ
USA WEB MARKET is the Best Verified PayPal, Payoneer, Cash App, Skrill, Neteller, Stripe Account and SEO, SMM Service provider.100%Satisfection granted.100% replacement Granted.
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
ย
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
ย
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website โ www.pmday.org
Youtube โ https://www.youtube.com/startuplviv
FB โ https://www.facebook.com/pmdayconference
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujaratโs DholeraAvirahi City Dholera
ย
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isnโt just any project; itโs a potential game changer for Indiaโs chipmaking aspirations and a boon for investors seeking promisingย residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
ย
Discover the innovative and creative projects that highlight my journey throughย Full Sail University. Below, youโll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
"๐ฉ๐ฌ๐ฎ๐ผ๐ต ๐พ๐ฐ๐ป๐ฏ ๐ป๐ฑ ๐ฐ๐บ ๐ฏ๐จ๐ณ๐ญ ๐ซ๐ถ๐ต๐ฌ"
๐๐ ๐๐จ๐ฆ๐ฌ (๐๐ ๐๐จ๐ฆ๐ฆ๐ฎ๐ง๐ข๐๐๐ญ๐ข๐จ๐ง๐ฌ) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
๐๐ ๐๐จ๐ฆ๐ฌ provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
โญ ๐ ๐๐๐ญ๐ฎ๐ซ๐๐ ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ๐ฌ:
โข 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
โข SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
โขFreenBecky 1st Fan Meeting in Vietnam
โขCHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
โข WOW K-Music Festival 2023
โข Winner [CROSS] Tour in HCM
โข Super Show 9 in HCM with Super Junior
โข HCMC - Gyeongsangbuk-do Culture and Tourism Festival
โข Korean Vietnam Partnership - Fair with LG
โข Korean President visits Samsung Electronics R&D Center
โข Vietnam Food Expo with Lotte Wellfood
"๐๐ฏ๐๐ซ๐ฒ ๐๐ฏ๐๐ง๐ญ ๐ข๐ฌ ๐ ๐ฌ๐ญ๐จ๐ซ๐ฒ, ๐ ๐ฌ๐ฉ๐๐๐ข๐๐ฅ ๐ฃ๐จ๐ฎ๐ซ๐ง๐๐ฒ. ๐๐ ๐๐ฅ๐ฐ๐๐ฒ๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐ ๐ญ๐ก๐๐ญ ๐ฌ๐ก๐จ๐ซ๐ญ๐ฅ๐ฒ ๐ฒ๐จ๐ฎ ๐ฐ๐ข๐ฅ๐ฅ ๐๐ ๐ ๐ฉ๐๐ซ๐ญ ๐จ๐ ๐จ๐ฎ๐ซ ๐ฌ๐ญ๐จ๐ซ๐ข๐๐ฌ."
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
ย
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
2. Group (3)
Ma Hnin Thiri Chaw (Roll no. 4)
Ma May Zin Htet (Roll no. 14)
Ma Mya Myin Kyi (Roll no. 25)
Ma May Myo Mon (Roll no. 36)
Ma May Thu Naing (Roll no. 45) { Leader }
Mg Thein Oo (Roll no. 53)
Ma Zin Hnin Phyu (Roll no. 57)
Ma Khine Hnin Hnin Thu (Roll no. 71)
Ma Yin Mar Naing Win (Roll no. 81)
Ma Ei Ei Phyo Zaw (Roll no. 90)
2
3. Contents
Competitive Advantage
Generic Building Blocks of Competitive Advantage
Business Functions, Value Chain & Value Creation
Distinctive Competencies, Resources & Capabilities
Durability of Competitive Advantage
Why Do Company Fail?
Avoiding Failure & Sustaining Competitive Advantage
3
6. Competitive Advantage
If its profit rate is higher than the average for its
industry, it is said that the company has a competitive
advantage.
Two basis conditions determine the companyโs profit
rate:
(1) The amount of value customers place on the
companyโs goods and services
(2) Companyโs cost of production
6
7. Competitive Advantage (Cont.)
Company charged price must be less than value placed on the
goods and services under competitive pressures.
V> P = consumer surplus
A company can create more value
(1) by lowering C (Low cost)
(2) by making more attractive product through superior
design, functionality and quality (Differentiation)
Consumer place greater value on it (V increases) and
consequently consumer are willing to pay high price (P
increases). 7
8. Value Creation
Superior value creation requires that the gap
between V and C should be greater than the gap
attained by competitors. 8
10. Generic Building Blocks of
Competitive Advantage
Superior Quality
Competitive
Advantage
- Low Cost
- Differentiation
Superior Efficiency
Superior Customer
Responsiveness
Superior
Innovation
10
11. Efficiency
Business - device for transforming inputs into outputs
Inputs - basic factors of production such as
labor, land, capital, management, etc.
Outputs - goods and services that the business produces
Efficiency - the quantity of inputs that it takes to produce a
given output
Efficiency = Outputs/Inputs
11
12. Efficiency (Cont.)
The more efficient a company, the fewer the inputs required
to produce a given output.
Efficiency helps a company attain a low-cost competitive
advantage.
Most important component - employee productivity (output /
employee)
Highest employee productivity will typically have the lowest
costs of production.
12
13. Quality
Quality products are goods and services that are reliable in
the sense that they do the job they were designed for and do
it well.
High product quality on competitive advantage is twofold:
First, high-quality products increases the value of those
products in the eyes of consumers.
The company can charge a higher price for its products.
For example, Toyota Vs. General Motors
13
14. Quality (Cont.)
Second, high quality comes from the greater efficiency and
the lower unit costs it brings.
The company charge higher prices for its product, but also
has lowers costs.
14
16. Innovation
Innovation - anything new or novel about the way a
company operates or the products it produces
Innovation includes products, production
processes, management systems, organizational
structures and strategies developed by a company. (E.g.
- Toyotaโs lean production system - pioneer company).
Innovations give a company something unique -
something its competitors lack.
16
17. Innovation (Cont.)
When competitors succeed in imitating the innovator, the
innovating company had build up such strong brand
loyalty and supporting management processes that its
position proved difficult for imitators to attack.
17
19. Customer Responsiveness (Cont.)
Sources of Enhanced Customer Responsiveness
Quality
Innovation
Customization
Shorter customer response time
Superior design
Service
After-sale service and support
19
20. Customer Responsiveness (Cont.)
All these factors allow a company to differentiate itself.
Differentiation enables a company to build brand loyalty
and to charge a premium price for its products.
20
21. Impact of Efficiency, Quality, Customer
Responsiveness & Innovation on Unit
Costs & Prices
21
23. Business Functions
Different business functions of a company in the value
creation process:
production, marketing, R&D, service, information
systems, materials management and human resources.
23
24. Value Chain
It refers to the idea that a company is a chain of
activities for transforming inputs into outputs that
customers value.
The process of transforming inputs into outputs includes:
(1) Primary activities
(2) Support activities
24
25. Primary Activities
These activities include doing with the
design, creation, and delivery of the product, its
marketing and its support and after-sale service.
R&D Production
Marketing
& Sales
ServiceInputs Outputs
Primary Activities
25
26. Research & Development
It concerns with the design of products and production
processes.
R&D can increase the functionality of products which
makes them more attractive consumers.
As a result, there will become more efficient production
process with lower production costs and value creation.
26
27. Production
It is concerned with the creation of a good or service.
For physical products, it can be called as manufacturing.
For services, it means delivering to the customers.
The production function of a company creates value by
performing its activities efficiently and lower cost result.
27
28. Marketing & Sales
For example, Brand Positioning and Advertising
It can increase the value which the consumers perceive
to be contained in a companyโs product.
It also create a favorable impression of the companyโs
product in the minds of consumers.
By discovering consumer needs and communicating
them back to the R&D function of the company which
can design produce better match those needs, we can
create the value. 28
29. Service
The role of service is to provide after-sale service and
support.
It can create a perception of superior value in the minds
of consumers by solving customer problems and
supporting customers after they have purchased the
product.
29
30. Support Activities
These activities provide inputs that allow the primary
activities to take place.
Material Management
Function
Human Resource Function
Company Infrastructure
Primary Activities
Support
Activities
30
31. Material Management Function
/ Logistics
It controls the transmission of physical materials through
the value chain from procurement through production
and into distribution.
The efficient material management function lowers the
cost and creates the value.
Lower materials mean lower costs and greater value
creation.
E.g. Wal-Mart
31
32. Human Resource Function
The human resource function ensures that the company
has the right mix of skilled people to perform its value
creation activities effectively.
32
33. Information Systems
These systems refer to electronic systems for managing
inventory, tracking sales, pricing products, selling
products, dealing with customer service inquires.
Information systems hold out the promise of being able
to alter the efficiency and effectiveness with which a
company manages its other value creation activities.
33
34. Company Infrastructure
It means companywide context within which all the
other value creation activities take place.
Company infrastructure includes the organizational
structure, control systems, and culture of the company.
Strong leadership and top management can continuously
shape a companyโs infrastructure and the performance
of all other value creation activities within the company.
34
35. Cross-functional Goals
Achieving the competitive advantages requires strategies
that embrace several distinct value creation activities.
Cross-functional goals mean goals that cut across the
different value creation functions of a company. It also
requires substantial cross-functional integration.
35
37. Distinctive Competencies
Unique strength that allows a company to achieve
superior value and attain a competitive advantage.
product differentiation, cost reduction, value
creation
E.g. Toyota
37
40. Resources (Cont.)
Resources must be both unique and valuable.
A resource is valuable only if it helps create strong
demand for the companyโs products.
E.g. Polaroid
40
41. Capabilities
A companyโs skills at coordinating its resources and
putting them to productive use.
Capabilities are the product of its organizational
structure and control systems.
They reside in the way individuals
interact, cooperate, and make decisions within the
context of an organization.
E.g. Nucor
41
42. A Requirement to get Distinctive
Competencies
(1) A unique and valuable resource and the capabilities
(skills) necessary to exploit that resource.
(2) A unique capability to manage common resources.
42
43. Strategy & Competitive Advantage
A company needs to pursue strategies that
build on its existing resources and capabilities (its
competencies)
build additional resources and capabilities (develop
new competencies)
E.g. Walt Disney & 3M
43
44. The Relationship between
Strategies and Resources and
Capabilities
โข Functional level
โข Business level
โข Corporate level
โข International level
Resources &
Capabilities
(Competencies)
Strategies
Shape
Build
44
45. The Role of Luck
Scholars argued: Luck plays a critical role in determining
competitive success and failure.
This luck argument devalues the importance of planned
strategy.
It states that in coping with uncertainty some companies
just happened to stumble on the correct strategy.
45
46. The Role of Luck (Cont.)
Otherwise, they just happened to develop or possess the
right kind of resources and capabilities by accident
rather than by design.
From long-term perspective: This luck argument is
unconvincing explanation for the persistent success of a
company.
46
47. The Role of Luck (Cont.)
In deed, competition is a process in which companies
are continually trying to outdo each other in their ability
to achieve the generic blocks of competitive advantage.
Substantial competitive advantage cannot be driven by
luck but by conscious effort.
47
49. How long will a competitive advantage last
once it has been created?
Durability of
Competitive
Advantage
Barriers to
Imitation
Capability
of
Competitors
Industry
Dynamism
49
50. Barriers to Imitation
A company with a competitive advantage will earn
higher than average profits.
These profits send a signal to rivals that the company is
in possession of some valuable distinctive competency.
So, competitors can identify and imitate that
competency.
The speed of imitation depends on the durability of a
companyโs competitive advantage.
50
53. Imitating Resources & Capabilities
Imitating resources is the easiest distinctive
competencies to imitate by depending on possession of
unique and valuable tangible resources.
Resources are visible to competitors and can often be
purchased on the open market.
But, intangible resources can be more difficult to imitate.
53
54. Imitating Resources & Capabilities
(Cont.)
So, patent system should be made for prevention of
imitation.
These capabilities are based on the way decisions are
made and process managed deep within a company.
54
55. Capability of Competitors
โข A companyโs commitment to a particular way
of doing business - to developing a particular
set of resources and capabilities.
โข When a company has already had long-
established commitments to a particular way
of doing business, there may be slow to
imitate an innovating companyโs competitive
advantage.
Strategic
Commitment
โข The ability of an enterprise to
identify, value, assimilate and utilize new
knowledge.
โข To overcome internal inertia
Absorptive
55
56. Industry Dynamism
A dynamism industry environment is one that is
changing rapidly.
The most dynamic industries to be those with a very
high rate of product innovation.
The rapid rate of innovation means that product life
cycles are shortening.
Competitive advantage can be very transitory (or)
temporary.
56
58. Why do Companies Fail?
A company can lose its competitive advantage but still
not fail because it can earn average profits.
Three related reasons for failure:
Inertia
Prior Strategic Commitments
The Icarus Paradox
58
59. Inertia
Companies find it difficult to change their strategies
and structures in order to adapt to changing competitive
conditions.
E.g. IBM
59
60. Why do companies find it so difficult to
adapt to new environmental conditions?
They are difficult to change because a certain
distribution of power and influence is embedded within
the established decision-making and management
processes of an organization.
It means changing the established decision-making in
the organization means changing its existing distribution
of power and influence would diminish resist such
change.
60
61. Prior Strategic Commitments
A companyโs prior strategic commitments not only limit
it ability to imitate rivals, but may also cause
competitive disadvantage.
E.g. IBM
61
62. The Icarus Paradox
It is the root of competitive failure.
A company can become so specialized and inner-
directed that it loses sight of market realities and
the fundamental requirements for achieving
competitive advantage.
62
63. Miller identifies four major
categories among the rising and
falling companies
Pioneers
enamored of their own
originally brilliant innovations
continued to search for
additional brilliant innovations
ended up producing novel
but completely useless
products
Salesmen
became so convinced of their
ability to sell anything
paid low attention to product
development and
manufacturing excellence
spawned a proliferation of
unattractive, inferior products
63
64. Miller identifies four major
categories among the rising and
falling companies
Craftsmen
achieved early success
became so obsessed
lost sight of market realities
Builders
built successful
became so enchanted with
diversification for it own sake
Continued to diversify far
beyond the point at which it
was profitable to do so
64
66. Avoiding Failure & Sustaining
Competitive Advantage
Focus on the Building Blocks of Competitive Advantage
Institute Continuous Improvement and Learning
Track Best Industrial Practice and Use Benchmarking
66
67. Focus on the Building Blocks of
Competitive Advantage
Continue focusing on the four generic building blocks of
competitive advantage:
(1) Efficiency
(2) Quality
(3) Innovation
(4) Customer responsiveness
Develop distinctive competencies that contribute to
superior performance in these areas.
67
68. Institute Continuous Improvement
& Learning
Todayโs source of competitive advantage may soon be
rapidly imitated by capable competitors, or it may be
made obsolete by the innovations of a rival.
A company can maintain a competitive advantage over
time is to continually improve its
efficiency, quality, innovation, and customer
responsiveness.
The way to do so is recognize the important of learning
within the organization.
68
69. Institute Continuous Improvement
& Learning (Cont.)
They are constantly upgrading the value of their
distinctive competencies or creating new competencies.
The objective is to learn from prior mistakes and to seek
our ways to improve their processes over time.
69
70. Track Best Industrial Practice &
Use Benchmarking
One of the best ways to develop distinctive
competencies is to identify best industrial practice and to
adopt it.
Benchmarking is the process of measuring the company
against the products, practices, and services of some of
its most efficient global competitors.
70
71. Overcome Inertia
A further reason for failure is an inability to adapt to
changing conditions because of organizational inertia.
Overcoming the barriers to change within an
organization is one of the key requirements for
maintaining a competitive advantage.
71