3. 1. Competitive Advantage
Competitive advantage is
something that the
organization possesses
exclusively or does better than
the competition
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4. Firm Resource-based Competency
Core Competencies
ïČ Â Things a corporation can do
exceedingly well
Distinctive Competencies
ïČ Core competencies that are superior to
those of competitors
ïČ They are critical in helping a firm pursue
competitive strategies
2-4
5. 2. Competitive Strategy
âąthe choice of how a firm will compete in
its chosen market.
âąThe purpose is to seek a position of competitive
advantage such as low cost, operational
excellence, higher product quality, and superior
customer relationships.
2-5
7. Low Cost Leadership
ïâA true cost leader gears all its strategic
choices to the single goal of squeezing
out every cent of production and
distribution costs to provide a
competitive advantageâ
Save $ through whole supply chain
2-7
8. Internal strengths:
ïAccess to the capital required to make a significant
investment in production assets âeconomic scale, for
example, WalMart. (9700 retail units in 28 countries)
http://walmartstores.com/AboutUs/
ïSkill
in designing products for efficient manufacturing, for
example, TQM, avoiding waste, for example, TOYOTA.
ïEfficientdistribution channels-Saving
transportation/warehousing cost, for example, Costco.
2-8
9. Differentiation Leadership
ïObjective is to create a competitive
advantage by offering a product or service
that is perceived by the customer to be
unique in some desirable way.
ïTherefore obtain a premium price.
2-9
10. Internal strengths:
ïAccess to leading scientific research.
ïHighly skilled and creative product development
team.
ïStrong capability to successfully communicate the
perceived strengths of the product.
ïCorporate reputation for quality and innovation.
2-10