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SMMC_G9_Internal Analysis and Competitive Advantage (Group Members (Fion,…
SMMC_G9_Internal Analysis and Competitive Advantage
Group Members
Fion
Jerry
Adiyasa Gao
Anna
Levi
Pete
Phoebe
Case Introduction:StarBucks
Tangible resource
Inventory
Vacuum-packed bags
Rapid distribution
Intangible resource
Human Capital
barista training
first-hand knowledge of store operations
Very low rate of barista turnover relative to other coffeehouses
Relational
Specialty coffee becomes an “affordable luxury
popular culture: TV serial “Friends”
fair trade coffee
Technology
Blending of beans from different sources
Estate
rapid expansion of coffeehouses
retail operations
VRI framework
Rare
Yes
Environment friendly product and activities
Inimitable
Yes
tough for competitors to achieve this amount of global expansion
Valuable
Yes
Good service and product
Competitive Advantage
(Activities, Resources, Capabilities)
Activities of the Firm
links between activities & synergy exploitation
Soccer
team
Activities (Combined)
Resources (human capital)
Capabilities (
Tiki-taka
)
Challenges
to divide activities into groups/subsets ( more manageable & organized analysis)
to illustrate the relationships between activities (where generation of synergies & unnecessary & costly coordination are)
Solutions
1. Value Chain
(activities being performed in a company)
Manufacturing Firms
Primary activities
(value-adding steps)
inbound supplier logistics
sales & marketing
distribution logistics
customer service
intermediate & final production operations
Support activities
research & development
information systems
accounting & finance
human resources & procurement
not suitable (service industries--- airlines, telephone services, financial services, healthcare/ consulting)
2. Value Network
(maps important sets of activities and their relationships with each other)
Airline Industry
less generic in the sub-categories of activities used and how they are connected with each other
major activities
aircraft operation
scheduling
passenger amenities
route structure
linkages
specific (conscious choice)
customized
Apple
Strategists/ Strategic Analyst
Value Chain
to illustrate clear & explicit relationships
Value Network
Capabilities
Company Effects
Industry Effect
Performing resulting from being a more/ess profitable industry
Company Effects
Performance resulting unique attributes of the company
Firm Performance
How to define better performance?
What is" Better Performance"?
Long run profitability (NPV)
Economic Value Added (EVA)
Competitive Advantage
Firms that perform better than their competition are said to have a competitive advantage
How to define competition?
The Goal of all Strategy
Sustain Competitive Advantage
Sustained Competitive advantage
An important goal of strategic management is to create a competitive advantage for a company that can be sustained over time.
Four Potential Challenges
Imitation and Replication
other firms will figure out and implement company product development processes and routines
Non-durability or Non-relevant
threats to the firm's ability to continue to create value
Prevent these four problem
Casual ambiguity
a companies performance advantages where it come
from
Complexity
success depends on a very precise combination of these different elements
Tacit knowledge
a knowledge that cannot be easily explained and transferred to another company
Make other company hard to learn The knowledge
property rights
the property rights that matter are mostly over intangibles,
trademarks that covered it's brands, and logos, copyrights over software
rise the cost
In order to make our rival mimic our competitive advantage.
VRI
VRI is resource or capability is valuable, rare and inimitable
To have a temporary competitive advantage, the firm must possess a resource or capability that's both valuable and rare
To enjoy a sustained competitive advantage, the firm's resource or capability must be all three valuable, rare and difficult to imitate
Durability
internal company strength can continue to diminish over time
preserving your resources, maintaining your activity system, retaining your people and so on
Managerial training and intervention can strengthen the system and the ability of the company's activities,
Relevance
the biggest one faced by companies today
a dynamic and constantly changing business environment,
companies must be able to change the source of competitive advantage
to have competitive advantage, these resources must create economic value and must be scarce
continuing to create economic value means that companies need to ensure that their activities, resources and abilities remain durable and relevant
Resources and Capabilities
Resources :star:
Intangible resources
Relationships
Which resources matter most in today's business environment
:question:
Greatest potential to create economic value
:red_flag:
Human capital
Technology
Creating economic value
Differentiate firms from their rivals
Tangible resources
Real estate
Machinery
Buildings
Financial resources
Borrowing capacity
Cash at hand
Capabilities
:star:
Capability must be reliable and repeatedly perform that activity in a consistent way
Apple Incorporated
Great marketing capability
Capability development requires learning and application
How to bring in competitive advantage
Help the apple perceptibly increase EVA
:!:
Our company unique in its access to such a source of value
:!:
Case introduction:Apple
Product is simple to use
Path dependence
Establish the iTunes Store and Apple Store
companies have unique internal attributes that others don't
Creating competitive advantage :!:
Grasp of substantive differentiators that really
1 more item...
Important to create EVA
:red_flag:
Key turing point :!:
Approach internal analysis
having a capability doesn't necessarily assume that the activity will be performed in a superlative manner.
Actual execution ability
Executive Exepertive
Innovation
building sustainable competitive advantage are difficult
it's very difficult for someone that's brand new to compete with us
Capital
Technology
skill level
Analytics
people and personnel we have
analytical capability
We are 5-10 years ahead of what our competitors are doing
developing different deployment architecture for reverse analytical models
Price risk
Improve our product much more
Focus our customers wanted
Become a short-term and mid_term competitive advantages
Long-run competitive advantage
People
strong financial advisers
spend a lot of money on recruiting and retaining financial representatives
Culture
