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Developing a competitive strategy - Coggle Diagram
Developing a competitive strategy
Learning objectives
What is competitive advantage?
How do we build and sustain competitive advantage?
how might we lose it?
chapter 1
business model
competing through disruption
amazon - internet book store
starbucks - redefining coffee store, a third place from home, office
apple
personal computer
for
home office user
, sell at
retail store
competitive is never permanent
toothpaste (basic function + added function)
Walmart -> supply chain management in rural area
Japan car enter US/ Euro market (xe bền)
Nokia vs Iphone, Samsung
"competitive is always relative to market-specific "
two faces of a competitive advantage
onstage advantage
Onstage competitive analysis must always be the starting point in figuring out what competitive advantage you do or do not enjoy.
Favorable customer perception is the key to growth, but it doesn't guarantee competitive advantage. Why?
-> Companies may boast advantages to customers, but lack internal structures (backstage competitive) to backup their claims.
backstage advantage
Backstage advantages are what enable the company to create and sustain onstage advantages.
competitive is always relative, market-specific
a market - segment by location, age, gender, sales channel, distribution channel
strategy is about creating sustainable competitive advantage
must compare this to competitors
chapter 2: sources of onstage advantage
understand industry dynamics
managing complementors
deep customer alignment
focus on entire purchase-and-consumption cycle
When analyzing their company's competitive advantage, whether in terms of the current situation or planning for the future, managers often take a very narrow approach. They implicitly assume that the potential customer has already decided to make a purchase, has identified alternative vendors, and the only question left is which company's products and services are better and or cheaper -> wrong -> need focus on entire purchase-and-consumption cycle
next step
at each point in this cycle, does your company enjoy a competitive advantage?
Customer journey / how does the customer
realize the need?
define the need?
identify alternatives?
choose a vender?
place the order?
pay for the order?
follow up on the order?
have goods and services delivered?
store goods?
utilize them effectively?
mantain and upgrade?
dispose of the old goods?
note
Amazon activates multiple points in the sales process, from tracking and predicting purchases to quick check-out mechanisms.
Customizing products and services without raising cost or price
chapter 3: sources of backstage advantage
superior value-chain architecture
example
Amazon
IKEA approach to furniture design reduce the price by changing all 4 cost structure
Next-step
map out the entire value chain of your business ?
could you completely redesign the architect of the value chain?
relationship advantage
Next-step
who has more durable relationship with customers?
what could you do to increase the stickiness of your company's relationships with your existing customers?
competing through innovation
Next-step
does your company have a culture that recognizes, supports, and scales up innovation?
technology - Chat GPT
product - Apple
service - Facebook
process - Toyota
business model - Amazon
Scale and scope advantages
->economic of scale
next step
has larger size yielded competitive advantage for your company?
and is the company as nimble today as it was then?
find your alpha
3 buckets
alpha (advantages)
better than competitors
beta
good enough for competitors
gamma (disadvantages)
weaker than competitors
next-step
chapter 4: from strategy to action
two team of different perspectives to do this 6 steps simultaneously
Identify the company's onstage and backstage advantages and disadvantages
Develop a set of action plans regarding what the company should do to eliminate weaknesses and become stronger
Develop a strategy for preserving and strengthening company's alphas and oursourcing any betas and gammas
Develop a 12-month action plan
Pick the best ideas. Harmonize them and agree on a 12-month action plan
Assign responsibilities and provide resources
what is competition
the factors that cause customers to select you vs other alternatives
exp: Amazon is the competition of
selection
easy buy
fast delivery
easy return
strategy is about creating sustainable competitive advantage
