Competitive Advan Competitive_Advantagetage

8/13/2019 Competitive Advan Competitive_Advantagetage

1/29

G2

CompetitiveAdvantage


2/29


3/29

The company will be able to apply to strong point

Without being what does not evaluate a property and the

ability which the company possesses

Competition company comparison will lead and the strongpoint which is relative could be grasped.

The strategy which sees from viewpoint of competitive advantage

Continuous a competitive advantage reinforcement andcompetitive advantage endeavors not to disappear


4/29

The reason why enterpriseNeed to have a competitive advantage

Resource/Performance

1. Customer satisfaction and loyalty increase, Increase of profit, Increase of market share bring market performance

2. The product offering which is value in the market competitive advantage offering valuable product and service

3. various size and scope and profitability of company The competitive advantage makes the base will be able to

expand the enterprise which is various.


5/29

Competitive Advantage Cycle.

Step 1. Source of Competitive Advantage

Superior assetsSuper CapabilitiesKey Success Factor

Step 2. Barriers to Imitation

higher the barrier to entry to companyWhen the new business opportunitycoming from the Market which entersfirst mover advantagebarriers to imitation


6/29

Step 3. Value proposal form of competitive advantageOperational ExcellenceProduct Leadership

Customer Intimacy

Step 4.Encroachment prevents - competitive advantage

New competitive advantage position construction effortencroachment prevents proliferation of competitive advantage

Reinvestment of profit asset and capability accumulationresource strengthen of competitive advantage


7/29


8/29


9/29

Main aspects of five forces analysis

1. the rivalry between existing sellers in the market

2. the potential threat of the entry of new competitors

3. the threat of substitute products becoming availablethe market

4. the bargaining power of consumer

5. the bargaining power of suppliers


10/29

Main aspects offive forces analysis


11/29

Competitive advantagestrategies


12/29

1. Cost Leadership (Low Cost Strategy)cost Leadership mean that produce goods level of equal morein expensive

2. Differentiation (Differentiation Strategy)Differentiation is that provide inventive value can improve ofperceive valued of consumers toward product (or service) in themarket.

3. Focus Cost Leadership / Differentiation:When competition's range is narrow, in other words when

target on specific customer segment will be focused cheapprice and differentiation strategy.


13/29

Source of Global CompetitiveAdvantage


14/29

Adapting to Local Market Differences

Companies must respond to the inevitableheterogeneity they will encounter in these markets.

Differences in language, culture, income levels,customer preferences, and distribution systems.

Source of Global CompetitiveAdvantage


15/29

Offering standard products and services across countriesreduces the boundaries of the served market to only those

customers whose needs are uniform across countries.

- Tailoring products and services to the preferences of localcustomers enhances the value delivered to them.- A portion of this increased value should translate into higherprice realization for the firm


16/29

One of the natural advantages enjoyed by most local competitors

stems from their deep understanding of and single-mindedresponsiveness to the needs of the local market.


17/29

Exploiting Economies of Global Scale

Building a global presence automatically expands acompany's scale of operations, giving it largerrevenues and a larger asset base.

Potential benefits of economies of scale in variousways: spreading fixed costs, reducing capital and

operating costs, pooling purchasing power, andcreating critical mass.


18/29


19/29

Exploiting Economies of Global Scope

Global scope refers to the multiplicity of regions and countriesin which a company markets its products and services.


20/29

Tapping the Optimal Locations for Activities and resources

A firm that can exploit these intercountry differences better than itscompetitors has the potential to create significant proprietary advantage


21/29

Maximizing Knowledge Transfer Across Locations

(a) Faster product and process innovation.

(b) Lower cost innovation.- A second by-product of not reinventing the wheel is considerable savingsin the costs of innovation.

(c) Reduced risk of competitive preemption.

- A global company that demands constant innovations from itssubsidiaries, but does not leverage these innovations effectively acrosssubsidiaries, risks becoming a fount of new ideas for competitors.


22/29

How a firm can actually

create and sustain a

competitive advantage

in its industry?


23/29

Competitive Advantage Definition

Competitive strategy is about being different. Itmeans deliberately choosing to perform activitiesdifferently or to perform different activities thanrivals to deliver a unique mix of value.

-- Michael Porter


24/29

Two Basic Types

Both can be more broadly approached or narrow,which results in the third viable competitive strategy


25/29

Approach 1 to Competitive advantage: Cost leadership

-A firm sets out to become the low cost producer in its industry.

-Note: a cost leader must achieve parity or at least proximity inthe bases of differentiation, even though it relies on costleadership for its CA.

-Note: if more than one company aim for cost leadership,

usually this is disastrous.

-Often achieved by economies of scale

-Examples of Cost Leadership: Nissan; Tesco; Dell


26/29

Approach 1 to Competitive advantage: Cost leadership

Steps in Strategic Cost Analysis

STEP1. Identify the appropriate value chain and assigncosts and assets to it.

STEP2. Diagnose the cost drivers of each value activity andhow they interact.

STEP3. Identify competitor value chains, and determine the relative

cost of competitors and the sources of cost differences.

STEP4. Develop a strategy to lower relative cost positionthrough controlling cost drivers or reconfiguring

the value chain and/or downstream value.


27/29

Competitive advantage model 2: Differentiation

-a firm seeks to be unique in its industry along some dimensionsthat are widely valued by buyers.

-Note: a differentiator cannot ignore its cost position. In all areasthat do not affect its differentiation it should try to decrease cost;in the differentiation area the costs should at least be lower thanthe price premium it receives from the buyers.

- Areas of differentiation can be: product, distribution, sales,marketing, service, image, etc.


28/29

Steps in Differentiation

Competitive advantage model 2: Differentiation

1. Determine who the real buyer is

1. Identify the buyers value chain and the firms impact on it

1. Determine ranked buyer purchasing criteria

1. Assess the existing and potential sources of uniqueness in a firms

value chain1. Identify the cost of existing and potential sources of differentiation

1. Choose the configuration of value activities that creates the mostvaluable differentiation for the buyer relative to cost of differentiating


29/29

Competitive advantage 3: Focus

- a firm sets out to be best in a segment or group of segments.- 2 variants: cost focus and differentiation focus.

Competitive Advan Competitive_Advantagetage

Documents

Transcript of Competitive Advan Competitive_Advantagetage