Creating Advantage Module 3 and Sca

7/29/2019 Creating Advantage Module 3 and Sca

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Creating Advantage: Synergy and

vision versus Opportunities

Sustainable Competitive

Advantage


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SCA

It is an element or combination of elements ofthe business strategy that provides a meaningfuladvantage over both existing and future

competitors. Wal-Mart has a cost advantage because of its

scales .

Southwest Airlines has a fun personality and a

point to point model.

Dell computers efficient direct sales model makescustomized computers.


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Sustainable competitive Advantage

The Way you compete

Product strategy

Positioning Strategy

Manufacturing Strategy

Distribution Strategy

Basis of Competition

Assets and compete

What you offer

Value Proposition

Where you compete

Product market selection

Competitors selection

SCA


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Basis of Competition Asset and

Competition

Assets and competencies are the mostsustainable elements of a business strategybecause they are difficult to counter.

What you offer

the value proposition

An effective SCA should be visible to customers and

provide value position.

A product reliability is not visible to customers but it should

be made visible through advertising or product design, leads

to reliability positioning strategy. E.g. Gillette maintain

technological superiority.


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A solid value proposition can fail if a key

ingredient is missing.Procter and Gamble Pringles Potato chips had a

host of assets, such as consistent product,

long shelf life, a crushproof container, andnational distribution. The problem was that

these attributes were valued only if the taste

was perceived to be good. As a result, Pringles

ability to penetrate the snack market was

limited for decades until it made progress in

term of both actual and perceived taste.


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How are Pringles made?

Company facts:- We're glad you noticed that Pringles

are shaped differently and taste different. While

Pringles contain the same basic ingredients found in

other chip products, we take a totally radical

approach to the way we mix our ingredients. We buy

potatoes in the form of potato flakes and then addjust enough water and other wholesome ingredients

to make a smooth potato dough. The dough is cut in

uniform shapes and these cut-outs are placed on

pre-formed and Pringles-shaped carriers. The crispsare quick-fried and seasoned just right. Finally, they

go to the stack-packer and then on to your favorite

store.


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In most areas of the world local health regulations

require that food cannot sit under a heat lamp for

more than 16 minutes before it is deemed

inconsumable by the public. It is at this time interval

that one of the largest suppliers of fast food for the

world supplies one of the largest manufacturers of

potato chips their base ingredient. McDonald'scarefully collects unserved French fries and places

them into specially created dehydrators. The remains

are then flaked and placed into airtight containers

which are then shipped to Pringles factories all overthe world.


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Where You compete: the Product

Market Served

The important determinant for SCA is the

choice of the target product market.

A well-defined strategy supported by assets

and competencies can fail because it does not

work in market place.

One way to create market place value is to be

relevant to customers.


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Canada Dry : RIP ( 1995-1999)

Brand : Canada Dry

Company : Cadbury Schweppes ( Later Coca Cola)

Agency : Mudra Canada Dry was launched in India in 1995. The

brand ,from Cadbury Schweppes ,was a highly

popular brand of softdrinks across the globe.

Canada Dry was a much hyped brand because

it was from the house of Cadbury. Cadbury

Schweppes launched Canada Dry and Orange

Crush in the Indian market with much fanfare.Canada Dry was a Champagne Softdrink.


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The brand has positioned itself as a champagne and the

taste was different and refreshing.

The brand was also promoted heavily in various

media. The ad featuring the snow and tiger brings

back the nostalgia about this brand. The brand was

positioned as a premium coldrink . The brand gained

immediate acceptance because of its associationwith Cadbury. The brand had the potential to

become a premium softdrink brand in India.

But alas, the brand did not last too long in the

market. In 1999 CocaCola took over the beveragesbusiness of Cadbury Schweppes and like GoldSpot

and Limca , Coke killed this brand.


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It is sad to see such brands being killed for no

reason connected with customers. The only

reason for Coke to kill these brands was to

make way for Coke's original brands. In the

case of Canada Dry , the brand only had a

negligible presence in the Indian market.

Look at the Indian market now - Is there a

premium soft drink brand in India ? Neither

Coke or Pepsi was able to create a premiumsoft drinks category in India. They have not

even tried yet.......


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SCA Versus Key Success Factor

SCA

It is an assets or

competence that is the

basis for a continuingadvantage. E.g. Hyundai

ability to be superior than

competitor

Key Success Factor

It is an asset or competence

needed to compete. E.g.

distribution network forautomobile.


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What business managers name as

Their SCAs Reputation for quality

Customer service/product support

Name recognition/high profile

Retail good management and engineering staff Low-cost production

Financial resources

Product line breadth

Effective sales force

Market Share

Product characteristics/differentiation


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Strategic Option- Routes to an SCA

Quality

Product attributes

Product design

Product Line

Breath

Corporate

Social

Responsibility

BeingGlobal

Innovation

Focus

value

Customer

intimacyBrand

Familiarity

Strategic

Option


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Synergy between business units

can provide an SCA.

Synergy means that the whole is more than

the sum in parts. But here it means that two

businesses or two product-market strategies

operating together will be superior to thesame two business operating independently.

The result is increased customer value and

increased sale, lower operating cost, Reducedinvestment.


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Market/submarket

Ford Figo A thousand Ford engineers workedto build the Figo. It has sold 30,000 units in 25

weeks and will be sold in 50 countries

including Mexico, North Africa and the Middle

East.

Toyota Etios: At least 2,000 engineers from

India and Japan worked for over four years on

the low-cost car. Etios will be launched inBrazil, South Africa and China.

Nokia learn English Application- the service,

developed for the Indian market, has


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6 million user worldwide. The company is

looking to take its new consumer, such as the

Hispanic population in the U.S. it also plans toreplicate its tie-up with IGNOU globally.

Nestle Maggi Masala-ae-Magic: the high

nutrient and the low cost variant of Magginoodles developed for the rural poor in India

& Pakistan, is on its way to Australia and New

Zealand. Pepsi Kurkure and Nimbooz- After tasting

success in India, PepsiCo plans to launch these

products globally.

Creating Advantage Module 3 and Sca

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