Competitive Advantage Flashcards
What does successful competitive position rely on?
Current and future market attractiveness, but the ability to maintain the competitive advantage is the most important
What is Doyle’s 2008 take on getting a sustainable competitive advantage?
Strategic Characterisation Matrix.
What is the external view on a sustainable competitive advantage?
- Results from a position in the industry
- Firm secures a defensible position in the most attractive marker segments
What is the internal view of a sustainable competitive advantage?
- Results from internal resources
- Is distinctive to a companies assets and capabilities
- Hard for other firms to duplicate
- Determines the effectiveness and efficiency of functional activities
What is the competitive advantage cycle?
Sources of advantage - position advantages realised - competitive dynamics erode advantages - investment in renewal
What are some performance rewards that firms with a sustained competitive advantage can enjoy?
- Satisfaction
- Loyalty
- Market share
- High profit
What are the three generic strategies to a competitive advantage?
Porter’s Competitive Strategy
- Differentiation: more effective satisfaction of customer needs
- Overall cost leadership: lowest cost per unit
- Focus: niche specialisation
How can a firm achieve differentiation?
- Product
- Promotional
- Brand
- Distribution
- Pricing
How can a firm achieve cost leadership?
- Scale
- Experience
- Capacity utilisation
- Linkages
- Interrelationships
- Integration
- Timing
- Policy choices
- Location
How can a firm achieve a focus strategy?
- Focusing the product line
- Targeting a specific segment
- Limiting the geographical area
What are first generation competitiors?
- Based upon cost advantages
- Low labour costs, economies of scale and productivity
What are second generation competitors?
Low cost & high quality
What are third generation competitors?
- Accelerated new product development
- Low cost & are highly differentiated
- Wide variety of innovative new products at low cost/high quality. .(Sony, Honda & Nike)
What are customer defined strategies to a sustainable competitive advantage?
According to Mathur (1992)
What is a firms capability and competition?
According to Kay (1993) A firms distinctive capability when successfully applied to and industry or appropriate markets leads to a sustainable competitive advantage.
What can distinctive capabilities be based upon?
- Reputation
- Architecture
- Innovation
Explain upon how reputation can create a sustainable competitive advantage?
- Based upon high quality
- Costly to maintain and difficult to establish & maintain
- Easy to destroy
Explain upon how innovation can create a sustainable competitive advantage?
- This is the ability to bring innovation successfully to the market
- Issues of protection and exploitation
- Probably is not enough on its own
Explain upon how architecture can create a sustainable competitive advantage?
Has three dimensions: internal, external, network.
How can this add value?
- Organisational knowledge
- Co-operative ethics
- Organisational routine
What is the resource imitability ladder?
Collis & Montgomery 1995.
- Easy to imitate: unskilled workforce, undifferentiated products & services
- Imitated at a cost: Physical capacity & machinery
- Difficult to imitate: Brand image, reputation, customer loyalty, culture, motivation
- Cannot be imitated: Legal copyrights, patents, unique locations, unique physical assets
What are the seven dangerous misconceptions?
- First mover trap
- Superiority trap
- Quality trap
What is the marketing strategy funnel?
- Where are we now? External Analysis: industry, customers, competitors.
Internal Analysis: Resources - Where do we want to be? Segmentation, targeting, positioning, sources of SCA
- How will we get there? Alliances, relationships, innovation
Did we get there? Implementation, measurement & control
