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5 COMPETITIVE ADVANTAGE & BUSINESS MODEL (SOURCES OF CA…
5 COMPETITIVE ADVANTAGE
& BUSINESS MODEL
DEFINITIONS
Competitive advantage is at the heart of a firm's performance in competitive markets... CA grows fundamentally out of value a firm is able to create for its buyers that exceeds the firm's cost of creating it
(Porter)
A firm that earns superior financial returns within its industry over the long run is said to enjoy a CA over its rivals
(Ghemawat and Rivkin)
A firm experiences CA when its actions in an industry or market create economic value and when few competing firms are engaging in similar actions. A firm obtains above-normal performance when it generates greater-than-expected value from the resources it employs.
(Berney
SOURCES OF CA
COST LEADERSHIP
Low Cost
Lower pricing
FOCUS
Specific market / segment
Meet specific needs
DIFFERENTIATION
What
Quality
Innovation
How
Design
Brand
Technology
Customer service
Costs
R&D
Marketing
"ME-TOO" POSITIONING
DRIVERS OF BM
Novelty
Efficiency
Complementarities
Lock-in
VALUE PROPOSITION
Design
Which activities to perform?
Interdependence
How are activities connected?
Profit Mechanism
How to earn money?
Key Resources
Which resources are required?
BLUE OCEAN STRATEGY
Lower costs
Increase buyer value
Value innovation
DIMENSIONS FOR SUSTAINABILITY
Organization & Processes
Operation & Supply Chain
Strategy & Business Development
Culture
