1 Strategy Competitive Advantage Competitive Advantage. Always relative not absolute – compare to...

download 1 Strategy Competitive Advantage Competitive Advantage. Always relative not absolute – compare to benchmark Sustainable competitive advantage – maintain.

of 21

  • date post

    11-Jan-2016
  • Category

    Documents

  • view

    240
  • download

    6

Embed Size (px)

Transcript of 1 Strategy Competitive Advantage Competitive Advantage. Always relative not absolute – compare to...

  • * StrategyCompetitive AdvantageCompetitive Advantage.Always relative not absolute compare to benchmarkSustainable competitive advantage maintain over a long period of timeMust be based on strategic choices (cannot do everything). Example: JetBlue Airline David Neeleman Morris Air e-ticket bought by SW Air in 1993. Founded JetBlue 1998 Low cost and differentiation strategy tried.Strategy is not: A grandiose statement such as: (we will be number 1). Managers must meet competitive challenge. Blockbuster vs. Netflix. Organizational performance is determined by :Industry effects caused by the structure of the industryFirm effects caused by the actions of management

  • * StrategyCompetitive AdvantageStakeholders and competitive advantage.Identify what are the interest, opportunities and threats, social issues and concerns for:Internal employees, stockholders, managersExternal customers, suppliers, partners, community, governmentAnalyze, Formulate, and Implement (AFI) framework. SWOT analysis, Level of strategy ( Business, Corporate, Global ). Implement organizational design.Black-Swan events. The impact of a highly improbable event (Nicholas Taleb).

  • *Competitive Forces Shape Strategy

    How Competitive Forces Shape Strategy: By being aware of competitive forces, an organization can position itself to be less vulnerable to attack (Michael E. Porter, 1979)

  • *Competitive Forces Shape Strategy

    Porters 5 Forces Model

    Threat of NewEntrants

    Bargaining Industry Bargaining Power of Competitive Power of Suppliers Rivalry Customers Threat of Substitutes

  • *Strategic Planning ModelCritical Success Factor: Strategic Innovation

    Environmental ExecutionAnalysis Formulation Implementation& ControlS trengths MissionBudgetsMonitorW eaknesses ObjectivesProgramsFeedbackO pportunities STRATEGYProceduresT hreats Organizational Structure Policy Guidelines Feedback

  • *Life Cycle and Competitive Advantage

    Introduction Growth Maturity DeclineR&D Improve product Focus on Cost ControlTech change Econ of scale Standardize Reduce capacityAttention to Process improve Efficiency Cut products quality Distribution Costs cutsDesign change Value added Few changesProcess change Forecasting Optimal capacity

    Creating a Sustainable Competitive Advantage (David A. Aaker, 1989)Stage of the Product Life Cycle, Business Strategy, and Business Performance (Anderson & Zeithaml, 1984)

  • *Automobile Industry: Growth to Maturity (1932-2006)I. Depression to WWIIII. Post WWIIIII. 1970s The Oil Embargo and Competitive Rules ChangeIV. Today The Rules are Still Changing

    * In Maturity, focus on standardization, efficiency and costs** Grow by capturing existing market share*

    U.S. Motor Vehicle Sales (Millions of units)Year 1986 2000 2001 2002 2003 2004 2005 2006Units 16.1 17.1 17.5 17.2 16.9 17.3 17.4 17.0

    Source: Wards Automotive Reports

  • *Automobile Industry: 1913-1932 (Growth Phase I)

    * In Introduction, focus is on R&D, technical and design changes, attention to quality, and process changes*

    Source: U.S. Automobile Production Figure-Wikipedia

    Chart1

    266661913168220

    328891914308162

    4.9461915501492

    12483670701734811

    115267111877622351

    7769188717435898

    119310129118820445

    115176146243806040

    829301308551275618

    1231521389321147028

    2015723231821831128

    1604112648681720795

    1921003064791669847

    2667535477241426612

    2251601001820367213

    2217581193212607592

    19610413286051507132

    1817436409801140710

    138965619554615455

    56790313404210824

    Buick

    Chevrolet

    Ford

    Units Sold

    Sheet1

    19131914191519161917191819191920192119221923192419251926192719281929193019311932

    Buick26666328894.946124836115267776911193101151768293012315220157216041119210026675322516022175819610418174313896556790

    Chevrolet7070111187788717129118146243130855138932323182264868306479547724100182011932121328605640980619554313404

    Ford16822030816250149273481162235143589882044580604012756181147028183112817207951669847142661236721360759215071321140710615455210824

    Sheet1

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    000

    Buick

    Chevrolet

    Ford

    Units Sold

    Sheet2

    Sheet3

  • Automotive Industry Clustersin AlabamaLegendConcentration of Automotive SuppliersSuppliers by Zip Code1234 - 67 - 112059655920658510There are more than 383 Automotive Companies and Suppliers in Alabama.

  • *Strategic Planning

    The Locomotive IndustryThe Big Three 1825-1956 American Locomotive (ALCO)Baldwin LocomotiveLima Locomotive

  • *Locomotive Industry

    1939 General Motors Electro-Motive Division took lead in diesel-electric locomotives

    Why? Growth MarketStrength (R&D, developmental capital, aggressive marketing)

    Opportunity (Railroads wanted more diesel- electric locomotives)

    WWII Opportunity offered by historyDemand not determined by general market forces

    1950sEnd of Steam

  • *Strategic Planning Locomotive Industry

    Technology MaturesMaturity Focus on standardization, efficiency and costsStrength- Efficiency through standardizationOpportunity- Growth of container freightToday Big Two (EMD and GE)

    EMDGE

  • *StrategyCompetitive AdvantageDifferentiation (RCA used its R&D strength and its organizational structure to market successfully Color TV) Transformation: From ordinary to revolutionary

  • *RCA Strategic Advantage Differentiation

  • * StrategyCompetitive AdvantageLow Cost (Southwest Airlines strives to recruit and train the best personnel available, create innovative flight schedules, stress strong customer support, and provide high pay for employees)Transformation: From in-state service to national to?

  • *Competitive AdvantageSouthwest Low Cost

  • * StrategyCompetitive Advantage

    Innovation/Response (FedEx uses a hub-and-spoke system to rapidly respond to request for package shipments worldwide) Transformation: From national letter carrier to global cargo carrier

  • *Strategic AdvantageFedEx - Response

  • *StrategyCompetitive AdvantageDiversification (Boeing reacts to the maturing airframe market)Transformation: From an airplane builder to a high-tech product and service provider

  • *Strategic AdvantageBoeing

  • *Strategic AdvantageBoeing Delta Rocket

    *******************