Chapter 5 - Types and Sources of Competitive Advantage

Question 1

How does Hill, Schilling & Jones (2020) define Competitive Advantage?

Answer 1

“The achieved advantage over rivals when a company’s profitability is greater than the average profitability of firms in it’s industry”.

Question 2

What does Grant consider to be the Cost Advantage Drivers?

Answer 2

EoS
EoL - increase labour productivity/staff efficiency/ equipment designs
Production techniques
Product design (efficient design from the start)
Input costs - labor/RMs
Capacity utilizatiom=n
Residual efficiency

Question 3

How does Porter (1985) define differentiation?

Answer 3

“Providing something unique that is valuable beyond simply offering a low price”

Question 4

How has Apple exploited differentiation?

Answer 4

Price of iPhones > rivals

Differntial appeal led to strong demand growth

Question 5

Companies who have achieved dual strategy?

Answer 5

Six Sigma - concept where Japanese manuf. firms decrease defect rates for unique, high quality products. And so helps lower costs.

Memory Chips - Samsung was first mover to release new-gen chips, so helped achieve premium/ gain volume and production experience. Helped garner an overall cost adv.

Question 6

What was Richard. P. Rumelt’s view on having a good strategy?

Answer 6

“The natural advantage of having a good strategy is having one - many competitor/s won’t”.