The document discusses various strategies for achieving sustainable competitive advantage (SCA). It defines competitive advantage and discusses approaches like strategic vision, strategic opportunism, and a combined vision-opportunism approach. Porter's generic strategies of low cost, differentiation, and focus are explained. Other approaches like preemptive moves and synergies are also summarized. Specific strategies like quality option, brand building, strategic positioning, and first-mover advantages through innovation are provided as examples. Risks of strategic stubbornness and strategic drift are also highlighted.

1. SUSTAINABLE
COMPETITIVE
ADVANTAGE

2. Competitive Advantage
Wikipedia
Competitive advantage occurs when an organization acquires
or develops an attribute or combination of attributes that allows it
to outperform its competitors. These attributes can include
access to natural resources, such as high grade ores or
inexpensive power, or access to highly trained and skilled
personnel human resources. New technologies such
as robotics and information technologycan provide competitive
advantage, whether as a part of the product itself, as an
advantage to the making of the product, or as acompetitive aid in
the business process (for example, better identification and
understanding of customers).

3. Sustainable Competitive Advantage. The
Need !
The Key to a Successful Strategy
There are two major objectives of SCA :
• Creating SCA for the firm
• Neutralizing the effect of competitors

4. Examples
• Ebay
Ebay pioneers communities
built on commerce, sustained
by trust and inspired by
opportunity. Ebay brings
together millions of people
every day on a local, national
and international basis
through an array of websites
that focus on commerce,
payments and communications.
Google
Google’s aim is organize the worlds
information and make it universally
accessible and useful
Amazon.com
Our vision is to be worlds most
customer centric company, to
build a place where people can
come to find and discover
anything they might want to
buy online

5. Basic Approaches to Achieve SCA Strategic
Vision VS. Strategic Opportunism
There are two approaches for the development of SCA:
1. Strategic Vision
2. Strategic Opportunism
There are two strategic risks associated with the two
approaches.
1. Strategic Stubbornness
2. Strategic Drifts

6. Risk in Strategic Vision:
Strategic Stubbornness
It suggests that strategic vision may be faulty and its pursuits may be a
wasteful exercise
The vision may never be realized due to three major factors:
Implementation Barriers: Environmental barriers may emerge that
prevents effective implementation of the vision.
Faulty Assumption of the Future: e.g. E-Commerce and dotcom
companies
A Paradigm Shift: changes in technology, management styles etc
may change over time and make the vision redundant

7. Risk in Strategic Opportunism: Strategic
Drift
The Firm may drift into short-term business opportunities that can not
be financed or effectively managed.
Case study - Gul Ahmed Group – IT based company (Call Centers)
Guard Basmati Rice and Guard Engine Oil

8. Approach: Strategic Opportunism
Strategic opportunism believes that the environmental forces are so
dynamic and uncertain that it is very difficult to focus on the future.
Strategy should be based on the present and take advantages of
emerging business opportunities.

9. New Approach: Vision Plus Opportunism
Many firms today follow a combined approach of strategic vision and
strategic opportunism.
Strategic Vision guides the firm in the core business and the strategic
opportunism in managing the diversification into new business areas.
This SCA strategy is difficult to manage.

10. Dynamic Vision
An alternative SCA strategy is to adopt a dynamic vision where the
vision is changed in relation to the paradigm shift.
There are two paths relevant to the dynamic vision approach:
Strategic Intent and Strategic Flexibility.
• Strategic Intent: It is a sustained obsession of winning at all levels of
the organization - the intent to excel in all departments and obtain
global leadership.
3 M
• Strategic Flexibility: In order to tackle the strategic uncertainties
firms adopt a new vision in the face of new threats (challenges) and
opportunities.
Nokia

11. Issues of SCA
SCA strategy involves four keys.
1. How to Compete?
2. What are the Bases of Competition?
3. Where to Compete?
4. With Whom to Compete?

12. Characteristics of SCA
• Substantial: The SCA strategy should be substantial
enough to make a difference. Marginal difference or
superior may not be noticed or valued adequately by
the markets.
• Sustainable: The SCA must be sustainable or
enduring. The SCA factors should be such that its
importance does not evaporate or fade away with
time, or it cannot easily copied by competitors.
• Leveraged: Link an SCA with the positioning of a
business

13. Strategic Thrust- Routes to an SCA
A Strategic thrust (also known as generic business
strategy, strategic theme or strategic orientation) is
an umbrella concept that explains broad business
approaches of a firm targeted at obtaining SCA in
the group of business with a common strategic
theme.

14. Strategic Thrusts- Routes to an SCA
Three of the most important strategic thrusts are explained by Michael
Porter in terms of:
1. Low Cost advantage
2. Differentiation
3. Focus
Two more factors have been added in strategic marketing
1. Synergy
2. Preemptive Move

15. Porter’s Generic Strategies

16. Strategic Thrusts for SCA
Differentiation &
Positioning
Product Attributes
Service Benefits
Personnel Image
Image User&Usage
Low Cost
No frills product
Product Design
Production/operations
Scale Economics
Experience Curve
Preemptive
Move
Product
Production System
Customer
Distribution & Service
Focus
Product
Segment
Geographic Area
SYNERGY
Enhance Customer
Value
Reduce Operation
Costs
Reduce Investments
Strategic Thrusts
for Obtaining
Sustainable
Competitive
Advantage

17. Characteristics of Differentiation Strategy
Differentiation factors are competitive advantages a firm is able to exercise in a market in
relation to its competitors.
Differentiation strategy creates values for customers for which the customers are willing to
pay
Successful differentiation strategies have three characteristics
Generate Customer Value: The strategy must add value for the customer. The
differentiation strategy should be deigned from the customers perspective rather than the
firms perspective. Market research plays important role in understand the customers
perspectives.
Provide Perceived Value: The added value must be communicated to the customers and
they should effectively perceive it. Creating brand value is the most effective method for
communicating differentiating features of a product, service or a company.
Sustainable: The differentiation factors projected by the firm should not be easy to copy
by the competitors. The synergy and the preemptive move generate strong sustainability
of the differentiation strategy.
Tarang Milk Haleeb Milk Heinz Ketchup

18. Common Differentiation Factors
Differentiation strategy is targeted at creating superior values for the
customers. Superior values can be created through differentiation
strategy implemented over the product, services, personnel and image
1. Product Differentiation: Features, Style, Design, Performance,
etc.
2. Service Differentiation: Product delivery Installation, Customer
Training, Customer Counseling, Free Servicing, Warranty etc.
3. Personnel Differentiation: Expertise, Experience,
Responsiveness, Courteousness etc.
4. Image Differentiation: High quality, Modern technology, Industry
Leadership, Social responsiveness etc.

19. Approaches to Differentiation
There are two major approaches for developing sustainable
differentiation strategy.
1. Quality option approach
2. Building strong brands

20. The Quality Option Approach
• The Quality option approach is one of the strong and sustainable
differentiation strategy.
• This approach focuses on developing a reputation for good quality
and promise to deliver superior quality products or services to
customers.
• Under this approach, the firm should project its brand as the
premium brand associated with enhanced customer benfits,
premium price and ownership values.
• Quality perception of a product is dynamic and is liable to change
due to competitors, action introduction of superior technology
change in customers taste and preferences and many other
markets.

21. Focus of Quality Option Approach
This approach is implemented with two major focuses.
1. Total Quality Management: The TQM calls for quality focused
management systems where the whole process, people and
systems within the firm have one objectives- produce and deliver
superior quality products and services to the customers.
2. The Customer Focus: It requires the rooming of an organization
culture and programs directed at developing long-term sustainable
relationship with the customers. The top management should
have personal contact with the customers a system where
employee performance are to be judged by creating and retaining
satisfied customers and developing an in-depth understanding of
customer motivations, choice and satisfaction.

22. Building Strong Brand Approach
• This approach to sustainable differentiation
• focuses on building brand equity. r Brand equity generates
value to customers
• and provides the firm a space to adopt
• premium pricing and develop enhanced brand loyalty.

23. Aspects of brand Equity
Brand
Awareness
Perceived
Quality
Brand
Equity
Brand
Associations
Brand Loyalty

24. Positioning Strategy
• Positioning refers to the strategic decisions and actions intended to
create and maintain the firms product or services concept in
customer’s mind.
• In positioning the firm select some of the key differentiation factors in
which it has competitive advantage and establishes the image so that
customers view the product or service as different.
• In positioning the projected image is crucial and what the firm does to
the mind of customer is more important than what the firm does to the
product.

25. Types of Positioning
• Attribute Positioning : Based on product characteristics. Quality, taste,
durability. price etc.
• Benefit Positioning : Based on end-benefits of the product.
• Health, Beauty, timesaving, etc.
• Image Positioning: Based on the company's image as innovator,
market leader. or strategic alliances.
• Usage Occasion Positioning: Based on use of the product on a
particular occasion for a particular purpose.
• User Positioning: Based on 'the most suitable’. for a target group of
customers.

26. Strategic Positioning
• Strategic position refers to the firm’s aspirations as how the market
perceives its product or services relative to competitors and
services.
• Strategic position guides most of the strategic initiatives and
communication strategy of the firm.
• It is very important for a firm to have the correct positioning strategy
• Meezan Bank

27. Characteristics of Strategic Positioning
• Strategic: Positioning should be strategic not tactical. It should be
• Guided by a desire to have long-term advantage over the
competitors and their products.
• Under the Control of the Firm: The firm should have full control on the
strategic position. It should not be left in the hand of Customers. The
positioning strategy should reflect the business strategy.
• Different from Competitors: The strategic position should amply and
critically differentiate the firm and its product from the competitor and
their products.
• Meaningful to Customers: The strategic position should be able to
create important value to the customers and should reflect to their key
motivations

28. LOW COST STRATEGY
• The low cost is a popular strategy that not only provides important
value (low price) to customers but also builds high entry barriers.
• The low cost strategy is implemented through multiple approaches.
English Toothpaste

29. Approaches to Low Cost Strategy
• No-frills Product or Service: The low cost may be achieved by introduced by
removing all frills or extra benefits of the product or services. E.g. The
Southwest Airline
• The Product Design: Use of Cheaper materials, production processes and
technology can bring down the cost
• Operations: having operations in low cost countries access to low margin
distribution network, use of low cost capital can bring down the cost.
• Economies of Scale : Large size operation can provide opportunity to
effectively share the fixed cost over the units produced and bring down the
cost.
• The Experience Curve: As a firm gains experience in building a product its
cost in real terms will decline in a predictable rate.
Classic Example : South West Airlines Case Study

30. Focus Strategy
• The focus strategy concentrates on one part of the market or product
line
• The focus strategy has several advantages.

31. Implementation of Focus Strategy
The Focus strategy is implemented through three approaches.
1. Focus the Product line: This can help develop the firm a
technical expertise and achieve superiority over its competitors.
The firm can also develop innovative ideas in the product line and
be the leader in innovations.
2. Targeting a Segment: This can help the firm to design
appropriate marketing strategy perfectly tailored to the target
market segment.
3. Limit to a Geographical Area: Limiting the operation to a
geographical area and developing local brands can provide
effective SCA to the firm in terms of cost-effectiveness. However
this approach may be risky when a superior national brand is
introduced to the target geographical area.

32. Products
• A firm can implement preemptive move by introducing a
new product to the market.
• The firm can enjoy a desirable market position.
• Microsoft in Software and Intel in the computer processor
have always enjoyed the leadership position through their
product innovation.

33. Preemptive Move
• The Preemptive move is a strategic move directed at obtaining the
first mover advantage, which the competitors are unable to duplicate
or counter.
• Only a technologically and financially superior firm can implement
this strategy.
• Preemptive moves can be directed at products, production systems,
customers, distribution and service systems.
• CyberNEt vs WorldTel (Cards, Corporate)
• World Call - broadband
• Multinet

34. Implementing the Preemptive Move
• The preemptive move is fully based on innovation.
• Copying and duplicating competitors does not result in any
preemption.
• Event improvement move requires substantial investments in R&D.
• Preemption also entails a high degree of risk. Nevertheless, the profit
potential from preemption is also very high.
• Preemption also creates very high entry barriers and prevents
competitors from copying and duplicating actions of the first mover.

35. Methods of Obtaining Synergistic
Advantages
• Alliances: Synergy can be obtained through strategic alliances – forming
partnerships with other firms in production, distribution and promotion of
products and services.
• Core Assets and Competencies: A firms core asset or competency can
be used for obtaining synergistic advantage. The advantage is must be in
the core product, technology, management skills that are sustainable.
• Capabilities –Based Competition: Strategy Development must identify
the most important business within the organization such as shorter
product development process, dynamic product innovations and so on.
• Synergistic effects are obtained when the firm compete in the key process
of the organization, and obtain the competitive advantage in that aspect
where the firm is capable.

36. Thank You