Competition the right mind set

1. COMPETITION :
The Right Mind-Set
CHAPTER1 :BUSINESS
STRATEGY
P ROU D LY P R E S E N T
P h . D . V i p u t On g s a k u l
GROU P 1

2. VISION เราให้บริการความสะดวกกับทุก
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VISION
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VISION
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3. • Telling goal or aspiration
• Highlight key action
But Core question is :
Performance
in the face
of competition

4. Strategy
• Strategy explains how an organization,
faced with competition, will achieve
superior performance
competition Find competitive
advantage

5. • One of the reasons so many companies fail
to develop good strategies is that the people
running them operate with fundamental
misconceptions about what competition is
and how it works.
No
competition
No need
for strategy
No need to
come up with
a way to win

6. • Competition will define the choices you make
about how you are going to compete.

7. “May the best car win”
General motor in 2010
Dan Akerson (CEO)

8. Companies proudly proclaim that
they produce the “BEST”
products, provide the “BEST”
service , and attract the “BEST” talent.
Because their belief about the nature of competition

9. If you want to win, its obvious that
you should be the best. Or is it ?
To be the best Competition to be
the best syndrome
It will lead you inevitably to a flawed strategy
and that will lead to mediocre performance.

10. Warfare Business competition
- Only one winner
- Destroy enemies
- Enable to win without
annihilating your rivals
“everyday low price” “flair along with low prices”
Companies can choose to create
their own event

11. Sport Business competition
- Focus on outperforming their rivals
- One contest with one set of rules
- Only one winner
- More open ended and
multidimensional
“Fast burgers” “Slow burgers”
Focus more on meeting customer needs
than on demolishing rivals.

12. Seating in airport areas
Want customer to shop?
“don’t want seats that are
too comfortable”
Flexibility
“reconfigure waiting area”
The best hotel for one customer is not the best for another.
The best sales encounter for one customer is not the best for another
There is no best art museum, no one best way to
promote environmental sustainability

13. Companies will benchmark each other’s
practices and products
(One upman ship is not strategy)
Marriott - revive collection Hilton - serenity bed
Radisson - sleep number bed
Browne plazw - sleep
advantage program
Hyatt - Hyatt grant bed
Bed war

14. Companies will benchmark each other’s
practices and products
(One upman ship is not strategy)
Bed war
ended in 2006 because large investments developing,
installing and promoting its offering.
Low profit
But guests will not differentiate one
hotel from another just “bed quality”
All rivals compete on the same dimension,
no one gains a competitive advantage

15. Competition to be the best = impossible goal
ONE BEST WAY
Listening
same advice
Follow same
prescription
Companies will benchmark each other’s
practices and products
(One upman ship is not strategy)
Zero-sum competition
(no one can win)

16. price competition leads to the suffers of:
Producers Customers Supplier Employees
Because rivals are squeezed for
resources and forced to cut cost.
Destroyed an industry’s profitability + limit competition
+ Swallow each other up + reducing the no.
of rivals and allowing on or few companies to dominate the market

17. Isn’t “The best’ good for
customers?
Perfect competition in classical economic =
Evenly matched rivals selling equivalent products go head to head,
driving prices (and profits) down.
“MOST EFFICIENT WAY TO PROMOTE SOCIAL
WELFARE”
“What’s good for customers
(lower prices) is bad for
companies (lower profits)”

18. Isn’t “The best’ good for
customers?
Some customers want more
and some want less
There will be individuals in both groups who will not
be well served by the average

19. Isn’t “The best’ good for
customers?
Limited choice = destroy value
Pay too much for extra or forced to make do with
what is offered, even if it’s not really what you need.
• With all companies heading for the same place, it is difficult
to stay in the lead for long. Competitive advantage will be
temporary.
• Companies work hard, but their gains in quality and cost are
not rewarded with attractive profitability.
• Poor profitability undermines investment in future, making it
harder to improve value for customers
Zero-sum competition that has come increasingly
To dominate management thinking

20. Competition to be unique
Should compete to be unique
This concept is all about value
• It’s about uniqueness in the value you create and how you create it.
Madrid to Barcelona
Car or train Short flight
Compete between
airline
High speed train
Security screening ,
carry-on restriction, delay
Offer reclining seat,
computr outlets, food ,
entertainment + lower
Co2
rival
Customer
shift
Positive
advantage
Customer
shift

21. Competition to be unique
Zero-sum game Positive-sum game
Race to the bottom Produces better outcomes
CUSTOMERS CAN GET
REAL CHOICE

22. Red ocean vs. Blue ocean
Defining Red and Blue Ocean
What’s Red, What’s Blue ?
Red Ocean Strategy
• Compete in existing market
space
• Beat the competition
• Exploit existing demand
• Make the value-cost trade off
• Align strategy choice of
differentiation or low cost
Blue Ocean Strategy
• Create uncontested market
space
• Make the competition irrelevant
• Create & capture new demand
• Break the value-cost trade off
• Simultaneous pursuit strategy of
differentiation and low cost

23. The right mind-set for
competition

24. Competition to be unique
• Managers must understand that their choices will
influence the kind of competition that prevails in their
industry.
• Beware of anyone who claims there is only one way to
win
• Competition is multidimensional, and strategy is about
making choices along many dimensions not just one.
• No single prescription about which choices to make is
valid for every company in every industry

25. THANK YOU
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