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SMMC G3[BS-3] Internal Analysis and Competitive Advantage, Group 3, …
SMMC
G3
[BS-3]
Internal Analysis and Competitive Advantage
How firms obtain a competitive advantage
Case: Apple
the great technologies the company has developed
having a very unique human capital
great marketing capabilities
having a amazing leadership like Steve Jobs and Tim Cook
accumulation of early experiences
path dependence
they involve the deployment combination and linking of resources
3 main concept
1.
By Michael Porter
focus on activities
one firm chooses to undertake, and another one doesn't .
value network
divide activities into groups or subsets & illustrate the relationships between activities
service industries
value chain
manufacturing firms
3
focus on capabilities
the company's capacity to perform a particular activity,it must be reliable and be able to perform repeatedly.
EX:great customer service , innovative product design, low cost inventory management, product development, viral marketing.
may result from a combination of a few resources and a set of activities or processes
2.
focus on resources
one firm owns specific assets and another one doesn't.
intangible
technology
EX:product innovation, prototypes and designs.
relationships
EX:reputation and relationships with customers ,suppliers ,distributors and stakeholders.
human capital
EX:raw talent and skills of employees and how they're trained, motivated, and organized.
tangible
financial resources
EX: cash at hand ,borrowing capacity, physical resources like buildings, machinery, and real estate.
Which one is most important?
which have the greatest potential to create economic value?
which are more difficult for firms to own or access exclusively?
conclusion
how these internal attributes can result in a competitive advantage
increase economic value added
rare
Case:Starbucks
introduce
Where
Seattle
CEO
Howard Schultz
Why
sitcom - Friends
history
1983，Howard Schultz visits Italy and founds Il Giornale coffeehouses
1987，Starbucks was sold to Schultz and merged with Il Giornalewith，with a total of 11 stores
in Seattle and Vancouver
1982,Howard Schultz joins Starbucks
1971 ，begins by selling roasted whole coffee beans
2018，grown to over 29,324 stores globally
today，with more than 28,000 in 76 countries
third place besides work and home
do their work
socialize
browse the (free) internet
conduct business meetings
real estate operations
retail operation
novelty and variety
constantly innovating and adapting
other beverages
tea
Sparkling Water
juice...
personalization
food offerings
high quality specialty coffee
relationships with brokers and growers
Claims 99% of its coffee is “ethically sourced”
multiple quality checks conducted before and during shipment
blending of beans from different sources
takes several steps to prevent oxidation of roasted beans
Rapid distribution
Vacuum-packed bags
Coffee ground (as needed) in stores
human capital management
calls all its employees “partners”
employee benefits
health insurance
retirement
stock options
free coffee
college education support
frequently promotes
All managers undergo barista training to gain first-hand knowledge of store operations
recent updates
2020，available in a total of 16 major U.S. markets to expand nationally
2019，expand Global Coffee Alliance to China with Nestlé
2018，1.Uber Eats 2.establish strategic partnership with Nestlé
Executive Expertise
:Competitive Advantage
1.the sources of CA? (how to substain CA?)
traditional barriers
hard to substain
barriers entry is decreasing nowadays
constant change & improvement (to stay relevant with customers)
innovation
2.the key of create CA?
2.
technology
ex: flexible、configurable system
3.
analytics
analytics models are out of academic, be able to build them is important.
1.
scale
fairly and quickly
Ahead of your competitors doing!
4.
brand (value proposition for customers)
keep focus on customers' needs
question every dicision (always exise a better way)
figure out channel relationship (dynamics& role)
cooperate or competitive
3.the long run CA is from the people and culture
not satisfaction force companies change & improve (before they become a top player)
Competitive Advantage & Firm Performance
What drives company performance
Industry effects
Being in a more/ less profitable industry
:star:Company effects
Unique attributes of the company
Case: Southwest Airlines
Hasn't had a single year of negative net margins in entire period
Stock has had cumulative returns which is double over the same period
Competitive advantage
Something distinctive or unique about that company
Competition
Some set of rivals in the same industry
Better performance
Long run profitability
:pen:Economic Value Added
Accounting profitability
Stock market value
Sustained competitive advantage
Competitive advantage is sustained over time
Heterogeneity
Where do the inter-firm differences in profitability come from
Sustaining
How do the performance advantages be made durable
Sustained Competitive Advantage
potential challenges
imitation
other firms will figure out and implement
replication
other firms use different processes to achieve the same results
threats to value creation
non durability
Apple's key activities may fade from its value network
non relevance
firms need to prevent imitation, ensure the durability and relevance of internal strengths.
Example of isolating mechanisms
Tacit knowledge
Competitors may try to hire away key Apple employees
Resources mobility barriers
Complexity
Property rights
Apple has been seeking to enforce its patents against other companies like Samsung or HTC
Casual ambiguity
It's hard to reproduce success if companies don't know how Apple has become successful
Durability and Relevance
Relevance
company's existing sources may not be useful in the future.
companies need to be capable of changing their sources of competitive advantage through so-called
dynamic capabilities
.
Durability
Group 3
Alice 余佳錚
Katharine 邵渝恬
Eunice吳旻諼
Grace 李家齊
Evonne 廖怡瑄
Ilona 李佳蓉
:check: maps important sets of activities and their relationships between each activitie.
:check:
a good way to illustrate
primary activities & support activities
:green_cross:it don't arrange activities sequentially
Kevin Johnson
➜
2017
