Bpsm Core Compe. Dist. Channel
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Transcript of Bpsm Core Compe. Dist. Channel
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Copyright 2004 South-Western. All rights reserved.
31
Resources, Capabilities and Core Competencies
Resources Are a firms assets,
including people and thevalue of its brand name
Represent inputs into afirms production process,
such as:
Capital equipment
Skills of employees Brand names
Financial resources
Talented managers
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Copyright 2004 South-Western. All rights reserved.
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Resources, Capabilities and Core Competencies
Capabilities The foundation of many
capabilities lies in:
The unique skills and
knowledge of a firmsemployees
The functional expertise ofthose employees
Capabilities are often
developed in specificfunctional areas or as partof a functional area
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Copyright 2004 South-Western. All rights reserved.
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Examples of
Firms
Capabilities
Table 3.3
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Resources, Capabilities and Core Competencies
Core Competencies Resources and capabilities that
serve as a source of a firms
competitive advantage:
Distinguish a companycompetitively and reflect itspersonality
Emerge over time through anorganizational process ofaccumulating and learning how todeploy different resources andcapabilities
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Copyright 2004 South-Western. All rights reserved.
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Resources, Capabilities and Core Competencies
Core Competencies
Activities that a firm
performs especially well
compared to competitors
Activities through which the
firm adds unique value to its
goods or services over a long
period of time
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Copyright 2004 South-Western. All rights reserved.
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Building Sustainable Competitive
Advantage Four Criteria of
Sustainable
Competitive Advantage
Valuable
Rare
Costly to imitate
Nonsubstituable
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Copyright 2004 South-Western. All rights reserved.
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The Four Criteria of Sustainable Competitive Advantage
Valuable Capabilities Help a firm neutralize threats or
exploit opportunities
Rare Capabilities Are not possessed by many others
Costly-to-Imitate Capabilities Historical: A unique and a valuableorganizational culture or brand name
Ambiguous cause: The causes and
uses of a competence are unclear
Social complexity: Interpersonal
relationships, trust, and friendship
among managers, suppliers, andcustomers
Nonsubstitutable Capabilities No strategic equivalentTable 3.4
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Building Sustainable Competitive
Advantage Valuable capabilities
Help a firm neutralize
threats or exploit
opportunities Rare capabilities
Are not possessed by
many others
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Copyright 2004 South-Western. All rights reserved.
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Building Sustainable Competitive
Advantage Costly-to-Imitate
Capabilities Historical
A unique and a valuableorganizational culture or
brand name Ambiguous cause
The causes and uses of acompetence are unclear
Social complexity
Interpersonal relationships,trust, and friendship amongmanagers, suppliers, andcustomers
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Building Sustainable Competitive
Advantage Nonsubstitutable
Capabilities
No strategic equivalent
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Outcomes from Combinations of the Criteria for Sustainable
Competitive Advantage
Table 3.5
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Channel and Distribution Tactics
Bucklins definition of distribution
Todays system of exchange
Channel intermediaries
Six basic channel decisions
Selection consideration
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A channel of distribution
comprises a set of institutionswhich perform all of the
activities utilised to move a
product and its title from
production to consumption
Bucklin - Theory of Distribution Channel Structure (1966)
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Negotiation
Promotion
Contact
Transporting and storing
Financing
Packaging
Money
Goods
Todays system of exchange
Producers
Users
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Channel intermediaries - Wholesalers
Break down bulk
buys from producers and sell small quantities to
retailers
Provides storage facilities
reduces contact cost between producer and
consumer
Wholesaler takes some of the marketingresponsibility e.g sales force, promotions
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Channel intermediaries - Agents
Mainly used in international markets
Commission agent - does not take title of the
goods. Secures orders.
Stockist agent - hold consignment stock
Control is difficult due to cultural differences
Training, motivation, etc are expensive
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Channel intermediaries - Retailer
Much stronger personal relationship with the
consumer
Hold a variety of products
Offer consumers credit
Promote and merchandise products
Price the final product Build retailer brand in the high street
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Channel intermediaries - Internet
Sell to a geographically disperse market
Able to target and focus on specific segments
Relatively low set-up costs
Use of e-commerce technology (for payment,
shopping software, etc)
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Six basic channel decisions
Direct or indirect channels
Single or multiple channels
Length of channel Types of intermediaries
Number of intermediaries at each level
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Selection consideration
Market segment - must know the specificsegment and target customer
Changes during plc(product life cycle) - differentchannels are exploited at various stages of plc
Producer-distributor fit - their policies, strategiesand image
Qualification assessment - experience and track
record must be established Distributor training and support
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