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SMMC_G8 [BS-3] Internal Analysis and Competitive Advantage (Sustained…
SMMC_G8 [BS-3] Internal Analysis and Competitive Advantage
Resources and Capabilities
resources related to technology, relationships, and human capital
technology
prototypes
designs
product innovation
relationships
customers and clients
suppliers and distributors and other stakeholders
human capital
raw talent and skills
cohesive and coordinated
traditionally categorize
intangible
tangible
financial resources
physical resources
resource selection
the greatest potential to create economic value
difficult to own or access exclusively
effect of intangible resources
reasons for change
create economic value
greater access to financial and physical resources
capabilities
three aspects of definition
be reliable and be able to repeatedly perform
doesn't necessarily be performed in a superlative manner
actually do something
viral marketing capability
combines resources
deploys resources
product development capability
easy-to-use
learning and learning in
customer-friendly
result in a competitive advantage
create value
the history of a company and its early experiences
rarity
path dependence
iTunes Store
came across inventions
Competitive Advantage & Firm Performance
competitive advantage
better performance
economic value added (EVA)
compare accounting profits
return on equity
return on capital employed
return on assets
advantage
accounting data is regularly collected
available for many firms
disadvantage
data tend to be backward-looking
may not say about current competitive advantage
may not say about result in future better performance
company's stock market value
advantage
incorporate the future prospects in valuation
estimate the net present value
by projecting future free cash flows or cash profits
disadvantage
may be subject to irrational swings
might not incorporate tacit internal information
how the company's actually doing
the difference between the value generated and the cost incurred by the company for the average customer
whether a company has a competitive advantage
is difficult in practice to measure exactly value
suggestion
triangulate by using different approaches
develop a holistic perspective
do not use by a single imperfect measure
able to outperform its competition
firm performance
whether there are durable features of industries
industry effects /particular attributes
heterogeneity
why are there inter-firm differences in profitability
what attributes make firms different in their performance
how can a company acquire or develop these attributes
how to sustain a competitive advantage
Starbucks
activity analysis
value chain
primary activities
outbound logistics
products are sold in their own or in licensed stores
marketing and sales
invests more in superior quality products and a high level of customer service
operations
operates in more than 75 markets
service
“to be the leading retailer and brand of coffee in each of our target markets by selling the finest quality coffee and related products, and by providing each customer a unique Starbucks Experience.”
inbound logistics
company-appointed coffee buyers selecting the finest quality coffee beans from producers
support activities
human resource management
generous benefits and incentives, training programs for employees
technology development
the Starbucks phone app
infrastructure
well-designed and pleasing stores, dedicated team of employees in green aprons
resources and capability analysis
global presence
extensive global presence
customer loyalty
invested in better products and focused on customer service
brand equity
good product quality and customer service
supply chain
empower suppliers to sustain their quality of raw products
product quality
premium quality, premium price
customer service
empowering the customers and being more inclusive, provide the best quality customer service
conclusion
Why Starbucks can become the leader brand in the coffee industry？
high level of customer service
difficult to challenge and imitate
competitive advantage are quite sustainable
build customer loyalty
high-quality product
Sustained Competitive Advantage
internal attributes
imitation
other firms will figure out and implement one's product development processes and routines
replication
other firms use different product development processes but achieve similar results
essentially threats
non durability
the firm's ability to continue to create value, to continue to produce economic value added
non-relevant
isolating mechanisms
barriers to imitation and replication of a firm's competitive advantage
complexity
elements can be combined in many different ways
tacit knowledge
cannot be easily explained and transferred to another
causal ambiguity
unclear where exactly a companies performance advantages come from
resource mobility barriers
luring away key resources
resources that have agency and can choose where they want to be
property rights
ex: mining lease, exclusive real estate or intangibles
resource-based view (RBV)
the link between a firm's resources or capabilities and its ability to realize a sustained competitive advantage
valuable, rare and inimitable
Experts' opinions
key sources of competitive advantage
From the standpoint
the personnel
the skill level
the amount of capital
technology
analytics
deploy and build the models
price risk
the better we can price risk, the lower the rate and can offer to an individual consumer
operational capability
brand
provide value to your consumers and really build a brand
a sustainable competitive advantage over long periods
From a product perspective
be modest
never think the product is better than others
never be satisfied with status
never slacking
do more to improve the products
judge ourselves
always looked out at our competitive field
focus on customers' needs
coopetition
understanding the exact dynamics and play the correct roles
right people and the right culture in place
long-term competitive advantage
sustain their competitive advantage
constant change and improvement
staying ahead of the competition and disruption
innovation
stay relevant to customers and interact well with them
constantly question every decision every known answer
G8 Group member
中文四 鄭淳芳 Angel
國企四 鄭淳芬 Ruby
外文四 楊芯樺 Katherine
外文四 蕭 逸 Sophia
國企三 陳宜萱 Cindy
國企三 尹薔雰 Rose
Activities
efficient
chosen activity
divided activities
value chain
primary activity
goods production
support activity
development
human resource
finance
accounting
search
example: manufacture industry
link
relationship between activities
value network
example: airline
capability= resource+activity
