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Business Process Management

Business Process Management. Competitive Advantage. Competitive Advantage. Competitive Advantage is the role of complementary products or services in competition and in some industries (Porter, 1985)

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Business Process Management

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  1. Business Process Management Competitive Advantage

  2. Competitive Advantage • Competitive Advantage is the role of complementary products or services in competition and in some industries (Porter, 1985) • Is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices (Definition from: tutor2u) • Competitive advantage was published in 1985 as the essential companion to Competitive Strategy.

  3. Competitive Advantage & Competitive Strategies • Competitive Strategy focuses on the industry; Competitive Advantage concentrates on the firm’s activities: • Marketing • R&D • General cost & create value for buyers • Training employees • Competitive Strategy as the activity (Framework) to provide the tool for examining the competitive advantages or disadvantages

  4. Competitive Strategy • It is suggested four generic business strategies that could be adopted in order to gain competitive advantage • It is related to the scope of a businesses’ activities versus degree of product differentiation

  5. Value Chain & Porter’s Five Force • Porter’s value chain framework (1985) represents and analyzes the logic of firm-level value creation, include the strength and weaknesses (Stabell & Fjeldstad, 1998). • Porter’s five force competitive analysis framework (1980) is challenged in resource-based and industrial-based critiques, include the opportunities and threats.

  6. Value Chain • The value chain analysis framework create value by transforming input into product (Thompson, 1967) • Help to analyze specific activities through which firms can create value and competitive advantage

  7. Porter’s Five Force • Five forces industry analysis helps to assess and manage the long-term attractiveness of an industry (defined by Vernon Prior) • Combination with the SWOT analysis to identify the strength, weakness, opportunities, and threats, and analyze the advantages and disadvantages of the firms.

  8. Conclusion • Competitive Advantage provides the architecture for describing and assessing strategy, linking it to company behavior, and understanding the sources of competitive advantage. • Understanding industry structure is equally important for both investor and managers. The frameworks from Porter determines and identify the competitive advantage, and then make the decision for the competitive strategy in order to gain the benefit in the competition.

  9. Reference • Porter, M. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press, New York. • Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, New York. • Stabell, B. and Fjeldstad, D. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal, 19, 413-437. • Thompson, J.D. (1967). Organizations in Action. McGraw-Hill, New York.

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