BFBM(4-2016) Competitive advantage
-
Upload
hub-myanmar-company-limited -
Category
Business
-
view
426 -
download
0
Transcript of BFBM(4-2016) Competitive advantage
![Page 1: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/1.jpg)
Competitive Advantage
Prof.Dr.Aung Tun Thet
![Page 2: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/2.jpg)
Competitive Advantage
Prof.Dr.Aung Tun Thet
![Page 3: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/3.jpg)
![Page 4: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/4.jpg)
![Page 5: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/5.jpg)
![Page 6: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/6.jpg)
![Page 7: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/7.jpg)
![Page 8: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/8.jpg)
Competitive Advantage
• Being different• Choosing to perform activities differently• Perform different activities than rivals • Deliver unique value
![Page 9: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/9.jpg)
Diamond Model
Firm Strategy, Structure and
Rivalry
DemandConditions
FactorConditions
Related andSupporting Industries
Chance
Government
![Page 10: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/10.jpg)
4 Building Blocks of Competitive Advantage
• Low Cost• Differentiati
on
Competitive Advantage
Superior Quality
SuperiorCustomer
Responsiveness
SuperiorInnovation
SuperiorEfficiency
![Page 11: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/11.jpg)
5 Forces That Shape Industry Competition
RivalryAmongExisting
Competitors
Threat ofNew Entrants
Threat ofSubstitute Products
Bargaining Power of
Suppliers
Bargaining Power of
Buyers
![Page 12: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/12.jpg)
Competitive Advantage
Firm
Competitors
New Market Entrants
Suppliers Customers
SubstituteProducts
![Page 13: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/13.jpg)
Competitive Advantage
Cost AdvantageDifferentiation
Advantage
(Similar products at lower price) (Price premium from unique product)
![Page 14: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/14.jpg)
Generic StrategiesCompetitive Advantage
Low Cost Higher Cost
Competitive Scope
Broad
Narrow
Cost Focus
Cost Leadership Differentiation
Differentiation
Focus
![Page 15: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/15.jpg)
Sustainable Competitive Advantage
![Page 16: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/16.jpg)
![Page 17: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/17.jpg)
19th Century
• “If a man make a better mouse-trap than his neighbour, • the world will make a beaten path to his door.”
![Page 18: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/18.jpg)
21st Century
• Manage for uniqueness• Develop distinctive competence• Create competitive advantage
![Page 19: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/19.jpg)
Three competitive hot spots
1. Product innovation: Competitors secure detailed information on 70% of all new products within year of development; Patenting do not deter imitation; Imitation costs 1/3rd less than innovation and 1/3rd quicker
2. Production: New processes harder to protect; 60% to 90% of all “learning” diffuse to competitors
3. Marketing: Rivals react by adjusting marketing mix
![Page 20: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/20.jpg)
Sustainable Competitive Advantage
• Two key questions: 1. Which advantages sustainable?2. Why?
![Page 21: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/21.jpg)
Sustainable Competitive Advantage
• Three categories1. Size in targeted market2. Superior access to resources or customers3. Restrictions on competitors’ options
![Page 22: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/22.jpg)
1. Benefits of Size
![Page 23: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/23.jpg)
Size Advantage
• Markets finite• Competitors resign themselves to remaining
smaller• Fear if they matched leader’s size• Supply exceed demand to make market
unprofitable for everyone
![Page 24: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/24.jpg)
Size Advantage
• Commitment to being large - making durable, irreversible investments• Exploit opportunities• Preempt competitors• “First-movers”
![Page 25: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/25.jpg)
Size Advantage
• Three bases: 1. Scale2. Experience3. Scope
![Page 26: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/26.jpg)
Scale economies
• National, regional, or local level• Not confined to manufacturing• Wal-Mart
![Page 27: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/27.jpg)
Experience effects
• Size over time• Not at particular point in time• Irreversible, market-specific investment
![Page 28: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/28.jpg)
Scope Economies
• Milacron - largest U.S. machine tool manufacturer• R&D • Sales and service networks• Robotics• Activities coordinated • Contributions from one business to success of another• Hard to implement
![Page 29: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/29.jpg)
2. Access Advantages
![Page 30: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/30.jpg)
Preferred Access
• Resources or customers • Sustainable advantage independent of size
![Page 31: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/31.jpg)
Preferred Access
• Two conditions: • Secured under better terms than competitors • Enforceable over long run
![Page 32: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/32.jpg)
Enforceability
• Ownership• Binding contracts• Self-enforcing mechanisms
![Page 33: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/33.jpg)
Know-how
• Cumulative investments in R&D• Hidden - what rivals don’t see• Kept secret to yield advantage
![Page 34: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/34.jpg)
Inputs
• Supply bounded • Strictly limited supply
![Page 35: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/35.jpg)
Markets
• Mirror image of preferred access to inputs• Self-enforcing mechanisms - reputation,
relationships, switching costs, and product complementarities• Sensitive to customer preferences
![Page 36: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/36.jpg)
3. Exercising Options
![Page 37: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/37.jpg)
Sustainability of Advantage
• Not on size or access• Competitors’ options differ fundamental• Inability to imitate
![Page 38: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/38.jpg)
Sustainability of Advantage
• Rivals frozen into current positions:• Public policy • Defense• Response lags
![Page 39: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/39.jpg)
Guidelines for Strategy
• 1. Managers cannot ignore contestable advantages• 2. Distinction between contestable and
sustainable advantages matter of degree• 3. Not all industries offer equal opportunities to
sustain advantage• 4. Blessed with competitors with restricted menu
of options or preempt them
![Page 40: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/40.jpg)
Guidelines for Strategy
• Two things1. Commitment to competing particular way 2. Flexibility to compete effectively in other ways
![Page 41: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/41.jpg)
People Are Competitive Advantage
![Page 42: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/42.jpg)
![Page 43: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/43.jpg)
Best way to get out in front
• High tech development• Access to financial assets• R & D• …..
![Page 44: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/44.jpg)
Best way to get out in front
• Increasingly ineffective • Technologies merge• Regulations relaxed • Powerful strategic alliances
![Page 45: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/45.jpg)
Savvy fast-growing companies
• Achieve competitive advantage through own people and organizational capabilities• Create value:• Differ from competitors’ approaches• Not easily copied
![Page 46: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/46.jpg)
Competitors
• Obtain capital and technology• Match creative pricing strategies• Difficult to recreate culture, value system, operating principles, leadership style and management philosophy • People foundation of organizational capability
![Page 47: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/47.jpg)
Organizational Capability
• Anticipate and adapt to changing customer needs and marketplace forces• Through people, culture, internal structures, policies and practices
![Page 48: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/48.jpg)
Analogy
• Tree• Flowers, leaves and fruit - value it delivers• Roots represent organizational capability
![Page 49: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/49.jpg)
Organizational Capability
• Hidden below surface• Contributes to success• Cannot be easily copied• Premier competitive advantage
![Page 50: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/50.jpg)
Organizational Capability
• Intellectual capital• Minds and hearts of people – not buildings, tools,
financial capital • Differentiate and grow business – beat
competition
![Page 51: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/51.jpg)
FINANCIAL REWARDSRapid Growth
Profits
CUSTOMER BENEFITSCustomer focused decision making
Customer satisfactionInnovative products
OPERATIONAL PERSPECTIVESroduct development
Quick to marketORGANIZATIONAL
CAPABILITYInnovative HR
practicesTeam culture
Effective Communication
Common ways of working
Employer of choice
![Page 52: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/52.jpg)
Culture for Excellence
![Page 53: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/53.jpg)
Employee Involvement• Authority .
Information/Communication • Company Knowledge . Recognition/Rewards• Individual Knowledge . Rewards/Performance
COMPETITIVE ADVANTAGE• Employee Morale• Turnover• Customer Satisfaction• Financial Performance
Quality of Work/Life• Balance• Work Load• Diversity• Job Security• Resources
Service Quality • Top
ManagementCommitment• Quality
emphasis• Improvement/Innovation• Teamwork
LEADERSHIPBUSINESS PRACTICES
![Page 54: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/54.jpg)
Employee Involvement
• Make decisions and contribute (Authority)• Understand business and how organization
operates (Company Knowledge)• Learning and development opportunities (Individual Knowledge)
![Page 55: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/55.jpg)
Employee Involvement
• Open and ongoing communication between management and employees (Information & Communication)• Recognition and rewards for contributions
(Recognition & Rewards)• Link between rewards and performance (Rewards-Performance Link)
![Page 56: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/56.jpg)
Quality of Work Life
• Employees receive both personal and work-related support• Employees:• Balance work and personal demands effectively (Balance)• Challenging but reasonable work loads (Work Load)
![Page 57: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/57.jpg)
Quality of Work Life
• Treated fairly regardless of demographic differences - gender and race (Diversity)• Reasonable level of job security (Job Security)• Tools, materials and equipment to perform jobs
effectively (Resources)
![Page 58: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/58.jpg)
![Page 59: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/59.jpg)
![Page 60: BFBM(4-2016) Competitive advantage](https://reader035.fdocuments.in/reader035/viewer/2022070521/58f9a7a0760da3da068b5bdd/html5/thumbnails/60.jpg)
Thank You!