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COMPETITIVE ADVANTAGES

COMPETITIVE ADVANTAGES. The Strategy Concept. Strategy is: Process of developing sustainable competitive advantages Through positioning the company in the market, and Effectively developing and utilizing critical resources and competencies

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COMPETITIVE ADVANTAGES

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  1. COMPETITIVE ADVANTAGES

  2. The Strategy Concept • Strategy is: • Process of developing sustainable competitive advantages • Through positioning the company in the market, and • Effectively developing and utilizing critical resources and competencies • Strategy is not about what a company can do. It is about what it chooses NOT to do.

  3. What competitive advantages do they have? • Lexus • Hyundai • Volvo • Suzuki • Chrysler • Mercedes-Benz • Honda • Saturn • Toyota • Infiniti

  4. Competitive Advantages “Values to customer better than competitors” • Values • Recognized by customers • In comparison to competitors

  5. Competitive Advantages? • Low price • High skilled workforce • Company’s modern technology • Lots of capital • Convenience to customers • Trusting culture (managers – subordinates) • Good relationships with suppliers

  6. Porter’s Generic Strategies Low cost Differentiation Cost Leadership Differentiation Broad scope Focus Narrow scope The essence of competitive advantages is to be different in providing values to customers

  7. What Associate With Cost Leadership? • Standardized, simple products - minimum accessory • Simple, standard operation procedure • Tight cost control • High volume (Standard quality, customer service and responsiveness) What are some examples?

  8. What Associate With Differentiation? • Different values: (e.g., design, image, quality, convenience) • Relate to: • Quality control • Innovation and creativity (technical and marketing) • History (especially: image or status) • Often target at specific segments of the market

  9. What Associate With Focus? • Only focus on a particular (small) segment of the market – or niche • Focus differentiation • Market niche that values different features (VIP room in the casino, First class in the airline, Macau jockey club) • Focus cost leadership • Market niche that values “no frill” – low price and standard quality • Focus strategy can relate to access to customers (e.g., geographic or logistic conditions)

  10. Your Companies • What competitive advantages (and strategies) does it follow? Is it successful? • Cost leadership • Differentiation (what kind of differentiation?) • Focus (What are its niches?) • Does it fit all activities to develop these competitive advantages?

  11. Video: GM • Why did GM go bankcrupt? • What do we learn?

  12. Case: Small Store

  13. Product Values Competitive Advantages Minimum (Standard) Requirements

  14. What you have Values to customers How you use resources Standard Standard Standard requirements Resources Competencies Competitive Advantages Critical Core Sources of Competitive Advantages

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