Post on 07-Apr-2018
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BUILDING AND SUSTAINING
COMPETITIVE ADVANTAGE
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CREATIVE MEMBERS
NAME ROLL NO.
RAJANI GUJARATI 21
KARTHIKA GOPINATH 23
RASHMI SAWANT 47
SHILPA SERVEGAR 48
POOJA SHAH 51
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AGENDA
Meaning of competitive advantage Concepts
From competitors to competitive dynamics
A model of competitive rivalry
Competitor analysis
Market commonality
Resource similarity
A framework of competitor analysis Drivers of competitive actions and responses
Inter-firm rivalry
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AGENDA
Likelihood of attack
Likelihood of response
Competitive dynamics
Slow-cycle markets
Fast-cycle markets
Standardcycle markets
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MEANING OF COMPETITIVE
ADVANTAGE
Competitive advantage gives a company an edge over
its competitors
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CONCEPTS
COMPETITIVE RIVALRY:
It is an ongoing set of competitive actions and responses
among firms
COMPETITIVE BEHAVIOUR:
It is a set of competitive actions and responses the firm
takes to build or defend its competitive advantage
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CompetitiveAnalysis
Drivers ofCompetitive
Behavior
-Awareness
-Motivation
-Ability
INTER-FIRMRIVALRY
Likelihood ofattack
-First-moverincentives
-Organizationalsize
-Quality
Likelihood ofResponse
-Type ofcompetitive action
-Reputation
-Marketdependence
Outcomes-MarketPosition
-FinancialPerformance
A MODEL OF COMPETITIVE RIVALRY
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COMPETITIVEANALYSIS
Drivers ofCompetitive Behavior
-Awareness
-Motivation
-Ability
INTER-FIRM
RIVALRYLikelihood of
attack
-First-moverincentives
-Organizationalsize
-Quality
Likelihood ofResponse
-Type ofcompetitive
action
-Reputation
-Market
dependence
Outcomes
-MarketPosition
-FinancialPerformance
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COMPETITOR ANALYSIS
First step for a firm to predict the extent and nature
of rivalry with each competitor
Factors determining competitiveness of competitors:
Market Commonality
Resource Similarity
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MARKET COMMONALITY
The number of markets with which the firm and a
competitor are jointly involved
Engage in multi market competition
Example:
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RESOURCE SIMILARITY
The extent to which the firms tangible and intangible
resources are comparable to a competitors
Example:
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The shaded area represents the market commonality between two firms
Portfolio resources A Portfolio Resources B
II I
III IV
High
HighLow
Low
Market
Commonality
Resource
Similarity
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Competitive Analysis
DRIVERS OFCOMPETITIVE
BEHAVIOR
-Awareness
-Motivation
-Ability
INTER-FIRM
RIVALRYLikelihood of
attack
-First-moverincentives
-Organizationalsize
-Quality
Likelihood ofResponse
-Type ofcompetitive
action
-Reputation
-Market
dependence
Outcomes
-MarketPosition
-FinancialPerformance
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DRIVERS OF COMPETITIVE
ACTIONS AND RESPONSES
Awareness
Motivation
Ability
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Competitive Analysis
Drivers ofCompetitive Behavior
-Awareness
-Motivation
-Ability
INTER-FIRMRIVALRY
Likelihood of attack
-First-mover incentives-Organizational size
-Quality
Likelihood of Response
-Type of competitive
action
-Reputation
-Market dependence
Outcomes
-MarketPosition
-FinancialPerformance
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INTERFIRM RIVALRY
LIKELIHOOD OF ATTACK
First-mover incentive
Organizational size
Quality
LIKELIHOOD OF RESPONSE
Type of competitive action
Actors Reputation
Market dependence
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LIKELIHOOD OF ATTACK
FIRST-MOVER INCENTIVE:
First-mover:
An initial competitive action taken by a firm in order to
build or defend its competitive advantages
Second-mover :
A firm that responds to the first movers competitive
action
Late -Mover:
A firm that responds to a competitive action, a
significant amount of time after the first movers action
and second movers response.
LIKELIHOOD OF ATTACK
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LIKELIHOOD OF ATTACK
(Contd.)
ORGANIZATIONAL SIZE:
An organizations size affects the competitive actions taken
by the firm
LIKELIHOOD OF ATTACK
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LIKELIHOOD OF ATTACK
(Contd.)
QUALITY:
It exists when the firms goods or services meet or exceed
customers expectations
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LIKELIHOOD OF RESPONSE
TYPE OF COMPETITIVE ACTION:
Competitive responses to tactical actions differ fromresponses to tactical actions
It allows to predict a competitors response to a
competitive action that has been launched against it
LIKELIHOOD OF RESPONSE
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LIKELIHOOD OF RESPONSE
(Contd.)
ACTORS REPUTATION:
Actor:A firm taking an action or a response
Reputation:
Positive or negative attribute ascribed by one rival toanother based on past competitive behavior
LIKELIHOOD OF RESPONSE
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LIKELIHOOD OF RESPONSE
(Contd.)
MARKET DEPENDENCE:
It denotes the extent to which a firms revenues orprofits are derived from a particular market
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CompetitiveAnalysis
Drivers ofCompetitive
Behavior
-Awareness
-Motivation
-Ability
INTER-FIRMRIVALRY
Likelihood ofattack
-First-moverincentives
-Organizationalsize
-Quality
Likelihood ofResponse
-Type ofcompetitive action
-Reputation
-Marketdependence
Outcomes-MarketPosition
-FinancialPerformance
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COMPETITIVE DYNAMICS
It is concerned with the ongoing actions and
responses taking place among all firms competing
within a market for advantageous positions
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SLOW-CYCLE MARKETS
The markets in which the firms competitive
advantage are shielded from imitation commonly for
long periods of time and where imitations is costly
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FAST-CYCLE MARKETS
The market in which the firms capabilities that
contribute to competitive advantages arent shielded
from imitation and where imitation is often repaid
and inexpensive
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Launch
Exploitation
CounterattackReturns from
a SustainedCompetitive
Advantage
0 5 10
GRADUAL EROSION OF A SUSTAINED
COMPETITIVE ADVANTAGE
DEVELOPING TEMPORARY
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DEVELOPING TEMPORARY
ADVANTAGES TO CREATE SUSTAINED
ADVANTAGE
Launch
Exploitation
Firm has already
advanced to advantageNo.2
Counterattack
5 10 15 20
Time (years)
Returns
from a series
of replicable
actions
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STANDARDCYCLE
MARKETS
The market in which the firms competitive advantage
are moderately shielded from imitation and where
imitation is moderately costly
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THANK YOU!!!