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[BS-3b] Internal Analysis and Competitive Advantage - Coggle Diagram
[BS-3b] Internal Analysis and Competitive Advantage
Sustained Competitive Advantage
four challenges :warning:
replication
imitation
both are essentially threats to the rarity of the firm's internal attributes.
Ex. Apple :apple:
imitation
Other firms will figure out and implement Apple’s product development processes and routines.
replication
Other firms use
different
product development processes
but achieve similar results.
non-relevance
Both are essentially threats to the firm’s ability to continue to create value.
Ex. Apple :apple:
non-durability
Apple’s reputation and brand image could be lost over time, it's talented employees may leave or stop working well together.
non-relevance
Apple’s strengths in designing fashionable sleek products may become less relevant as the company pivots away from products that are accessories like the iPhone and iWatch, and towards products such as Apple TV or electric cars.
non-durability
G2：
國企三 楊慕慈、國企碩二 蔡潔麗、經濟碩一 西特、東南亞四 潘榮泰、國企三 唐銘清、國企三 柳辰蒝、管學三 江和學
Imitation and Replitation
Battiers
Mechanisms that prevent others firms from replication a company's competitive advantage
Ex-
Causal ambiguity,complexity,tacit knowledge,time expression,
diseconomics, property right
Michael Poter's description of acivity system in a
value chain or value network highlights a specific built-in barrier to imitation
built in imitation barreir is
essentially a complex argument
is difficult for other firms to know
exactly which activities are used
conclusion
Competitive Advantage
Importance for explaining company performance
Three sources
Activities
Resources
Capabilities
Criteria
Rarity
Economic value creation
Challenges to Sustaining Competitive Advantage
Maintaining rarity
Barriers to imitation and replication
Continued creation of economic value
Ensuring durability and relevance of sources
Isolating Mechanisms
complexity
Complexity implies that a precise combination of elements is necessary for success, making replication difficult.
Small mistakes in the combinations
can have major consequences
EX. APPLE
don’t get every element of
Apple’s activity system.
Apple’s imitators can and often do fall significantly short.
Tacit knowledge
cannot be easily and transferred to another
can only be learned by doing under the guidance
Time compression diseconomies
may lead making mistakes or producing lower quality work, which can lead to higher costs and more time spent fixing those mistakes
trying to speed up the process of learning
causal ambiguity
refers to the uncertainty about where a company's performance
advantages come from.
EX. APPLE
product development,
innovative culture
hard to reproduce APPLE'S success
marketing
leadership
Property rights
can be an effective barrier to imitation and replication
Trademarks, copyrights and patents
Property is not perfect preventing
luring away key resources
competitors may try to hire away key employees, or draw away their suppliers or partner application developers
Resource-Based View (RBV)
VRI framework
Developed by Professor Jay Barney
valuable, rare, and inimitable
Explanation of the link between a firm's resources or capabilities and its ability to realize a sustained competitive advantage
Emphasis on imitation barriers and isolating mechanisms
Durability and relevance of sources of competitive advantage
Durability and Relevance
Durability
Internal strengths diminish over time
Solution
Adding new source of competitive advantage to refill or replace old one
Try to preserve their internal strengths
Revelance
Existing sources of competitive advantage may not be as useful in the future
Solution
changing their sources of competitive advantage(Dynamic capibilities)