Sustainable competitive advantage

Question 1

Cluster analysis

Answer 1

Resource advantage- theres no point in being good at things if theres no demand for your product: The good starting point to statistically segment the market. Identify and class large sets of heterogeneous into smaller homogenous groups of customers or companies.

Question 2

Cluster analysis helps us understand?

Answer 2

Preference commonality and how to cater to the different groups needs

• what needs they have
• what product attributes they would like
• how market position can be improved

Question 3

Cluster analysis variables

Answer 3

1. Bases: foundation for segmenting (e.g. pricing, product features
2. Descriptors: profile and eventually target the derived segments (demographic and geographic)

Question 4

Cluster analysis steps

Answer 4

1. Segmentation: identifying subsamples of customers that are homogenous in their base
2. Describing: use descriptor variables to explain how the subsamples differ and can therefore be used to form efficient targeting strategies

Question 5

SCA characterisics

Answer 5

1. Customers care
2. you do it better than others
3. Its hard to duplicate

Non-subsitutable
Inimitable
Rare
Valuable

Question 6

Customer equity

Answer 6

Customers are financial assets and should be treated as spending is investments not costs