3) Competitive Advantage Flashcards
Bowman’s Strategic Clock
Pg 80 and 81
The positioning view
The positioning view sees competitive advantage stemming from the firms position in relation to its competitors, customers and stakeholders. It is sometimes called an ‘outside-in’ view because it is concerned with adapting the org to fit its environment.
The positioning approach to strategy takes the view that supernormal profits result from:
- high market share relative to rivals
- differentiated product
- low costs
Criticisms of the positioning view:
- the competitive advantages are not sustainable
- environments are too dynamic to enable positioning to be effective
- it is easier to change the environment than it is to change the firm
The resource-based view of strategy
This view sees competitive advantage stemming from some unique asset or competence possessed by the firm. This is called the ‘inside-out’ view because the firm must go in search of environments that enable it to harness its internal competencies.
Principles of the resource-based view (RBV)
Barney(1991) argues that superior profitability depends on the firms possession of unique resources. He identified four criteria for such resources:
&
Prahalad and Hamel coined the term core competence, which has three characteristics:
- valuable
- rare
- imperfectly imitable
- substitutability
&
A core competence is something that you are able to do that is very difficult for your competitors to emulate.
- it provides access to a wide variety of markets ( extendability)
- it increases perceived customer benefits; and
- it is hard to imitate
RBV vs Positioning View
Read pg 87
Resources audit
Pg 89 and 90
Pg 23 of key cards
Porters Value Chain
Pg 92, 93 and 94
Porters three generic strategies
1) cost leadership - same quality but low price
2) differentiation - innovative, enabling differentiation
3) focus - concentrating on a small part of the market
