Generic building blocks of sustainable competitive advantage

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Transcript of Generic building blocks of sustainable competitive advantage

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Tirthankar SutradharGeneric Building Blocks of Sustainable Competitive Advantage

When two or more firms compete within the same market, one firm possesses a competitive advantage over its rivals when it earns (or has the potential to earn) a persistently higher rate of profits

Pruning the portfolioDell became really successful by exploring the web as a distribution channel.Gillette has made a fortune by establishing a continuous relationship with customers based on its disposable razors.Apple resurged based on its core capacity of bringing design to computers and electronic gadgets.Cisco became famous for its capacity of configuring activities in new and innovative supply chains.Intel thrived for its capacity to get partners to build on its processing platform.Google tapped in an innovative revenue streams by linking highly specific search results and content with text ads.Wal-Mart became dominant by its ability to slash cost throughout its business model.

Evolution of Competitive Advantage

Emergence of Competitive Advantage

4 Building Blocks of Competitive Advantage

The Main Types of Competitive Advantage

Cost advantageDifferentiation advantageCompetitiveadvantage

Similar productat lower costHigher pricefor unique product

Once establishes, competitive advantage is eroded by competition. The speed with which competitive advantage is undermined depends on the ability of competitors to challenge either by imitation or innovation

Sustainable Competitive Advantage

Sustaining Competitive Advantage

Sustained competitive advantage comes from maintaining higher profits than competitors over long periods of time.

The Coca-Cola Business ModelCoca Cola is the best example of a company with sustained competitive advantage, innovation, an extensive business model and an intelligent and substantial distribution network.The Coca-Cola Company was incorporated in 1892 to produce the sweet fizzy drink first developed by a pharmacist that has become the worlds most recognised brand.Today, almost 120 years later, The Coca-Cola Company is still going strong and is one of the most sought-after stocks on the New York Stock Exchange.Coca-Colas competitive advantage has proven its sustainability over the last 100 years.

Competitive Advantage of Coca-ColaThe secret recipe for Coca-Cola, which arguably tastes better than other cola drinks.Their ability to continue developing new products and re-inventing old ones Coca-Cola currently offers over 400 brands in 200 markets worldwide.The worlds most comprehensive distribution system has made Coca-Cola accessible to billions of people worldwide. Coca-Cola is often available in ample supply to people in areas where other consumer goods companies would never consider delivering their products. The African continent is an excellent example its fairly common to see a small shop selling cold Coke in the middle of nowhere.Coca-Colas production techniques are so well developed that it costs a fraction of the selling price to manufacture their product, resulting in high profit margins.

Bottling

1886Coca Cola BORN1891Coca Colas first BOTTLINGIn a drug store

occurred

Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass..Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a drugstore incolumbus,GeorgiabyJohn Pemberton.The first bottling of Coca-Cola occurred inVicksburg,Mississippi, at the Biedenharn Candy Company in 1891.Joseph A. Biedenharn Biedenharn Candy Company15

1899The first bottlingwas doneAGREEMENT

1909

400Coca-Cola plantswere operatingBOTTLING

HISTORY OF BOTTLING1894 A modest start for a bold idea In a candy store in Vicksburg, Mississippi, , Joseph 1899 The first bottling agreement1900-1909 Rapid growth The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. By 1909, nearly 400Coca-Cola bottling plants were operating, most of them family-owned businesses.

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1930The company started movingGLOBALY

1960NewBRANDSwere Introduced

1920s and 30s International expansion Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Colawas being bottled in 44 countries.

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And the rest is History

Coca-Cola was made for the cure ofheadacheand other illnesses

Sales for the first year were only$50

Only 9

servings of the soft drink were soldeach day

Now number of coke bottles sold each day1.8 billion

is theCoca-Colamost recognized word inOkay

the world after

162 B115 B

In 2012Enterprise ValueIn 2012Total GDP

Total number of Coca-Cola Products3,500

Number of worldwide Coke employees150,900

Pruning the portfolio

Competitive Advantage of

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Pruning the portfolio

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