Article Presentation- Creating Competitive advantage.pptx

8/10/2019 Article Presentation- Creating Competitive advantage.pptx

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PRESENTED TO: PROF. ANIL KUMAR

PRESENTED BY: CHANDRA KANT

(222006)


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Emergence of Competitive Advantage

When two or more firms compete within thesame market, one firm possesses a competitiveadvantage over its rivals when it earns (or has the

potential to earn) a persistently higher rate ofprofit.

BUT C.A. is not always revealed in high

profitability.

A firm may forego current profit in favour ofinvestment in market share, technology,

customer loyalty or dividends.


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External Sources of Change Must have differential effects on companies

Responsiveness to Change

Based on the firms ability to respond to change

Anticipation and Speed

Internal Sources of Change Innovation Strategies

Can overturn the competitive advantage of other firms

Strategic Innovationtends to involve pioneering alongone or more dimensions of strategy:

New industries

New customer segments

New sources of competitive advantage

Emergence of Competitive Advantage


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CREATING vs SUSTAINING

COMPETITIVE ADVANTAGE

The article separates the challenges of creatingcompetitive advantage at a point in time from theproblem of sustaining advantage over time.

The success of a business depends on its ability tosustain its competitive advantage over time.

Analyses of companies identified as outstandingperformers in their industries are sought tounderstand the sources of their competitive

advantage, to determine why the advantagesproved sustainable, and to assess their futuresecurity.


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Sustaining Competitive Advantage

Sustaining competitive advantage

Imitation

Isolating mechanisms

Imitation

Identification

Incentive

Diagnosis

Resource Acquisition


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Types of Competitive Advantage:

Cost and Differentiation

Competitive

Advantage

Cost

Advantage

DifferentiationAdvantage


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Porters Generic Strategies


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Cost Advantage

Cost advantage can be achieved by:

EXPERIENCE CURVE

COST DRIVERS VALUE CHAIN METHOD

CORPORATE RESTRUCTURING & BUSINESS

PROCESS REENGINEERING


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Principal Stages of Value Chain

Analysis for Cost Advantage

1. Breakdown the firm into separateactivities

2. Establish the relative importance of

different activities in the total cost of theproduct

3. Compare costs by activity

4. Identify cost drivers5. Identify linkages

6. Identify opportunities for reducing costs


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VALUE CHAIN

for an Internet Startup


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Value Chain Analysis for

Differentiation

Four stages of a value chain analysis used

to construct a differentiation advantage:

1. Construct a value chain for the firm and

customer2. Identify drivers of uniqueness in each

activity

3. Select the most promising differentiation

variables for the firm4. Locate linkage between the value chain ofthe firm and that of the buyer


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CONCLUSION

A successful firm does not simply participate inan attractive industry. It also positions itself tohave a competitive advantage within the industry.

C.A. derives from added value. A firm has addedvalue when the network of customers, suppliers,& complementors in which it operates is betteroff with the firm than without it, i.e. the firmoffers something that is unique & valuable in the

market place. A firm can use its analysis of activities to generate

& assess options for creating competitiveadvantage.


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THANK YOU

Remember:

Attaining competitive advantage is only half ofthe strategic struggle. Sustaining advantage in

the face of relentless rivals & turbulent change

is the other, more demanding half.

Article Presentation- Creating Competitive advantage.pptx

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