Competitive Advantage

1
Competitive Advantage
2
Steps to Making a Decision

• Identify the Problem/Decision
• Identify the Criteria
• Identify the Alternatives
• Evaluate the Alternatives
• Select an Alternative
• Implement

3
Making a Decision

• What are the proper criteria?
• Cost?
• Product features?
• Whatever will create competitive advantage for
  your firm/organization, in general

4
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
5
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
6
Product Life Cycle
7
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
8
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
9
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
10
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
11
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
12
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
13
Generic Strategies for Earning an Above Average
Profit

• Low-Cost Leader
• The lowest-cost producer of a product or service

• Differentiation
• Producer of a product or service that is
  perceived as unique by the customer

14
Generic Strategies for Earning an Above Average
Profit

• Low-Cost Leader
• Retail
• Fast food
• Airlines
• Education
• Automobiles
• Shoes

15
Generic Strategies for Earning an Above Average
Profit

• Low-Cost Leader

• Differentiation
• Retail
• Fast food
• Airlines
• Education
• Automobiles
• Shoes

16
Generic Strategies for Earning an Above Average
Profit

• Low-Cost Leader
• The lowest-cost producer of a product or service

• Differentiation
• Producer of a product or service that is
  perceived as unique by the customer

Focus
Focus
17
Generic Strategies for Earning an Above Average
Profit

• Low-Cost Leader

• Differentiation

Parity
18
SWOT Analysis

• Strengths
• Opportunities

• Weaknesses
• Threats

iPhone
19
Porters Five Forces
Threat of New Entrants
Industry Competition
Buyer Power
Supplier Power
Threat of Substitutes
20
Creating / Adding Value

• Form Utility
• Place Utility
• Time Utility

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Production System
Inputs Sourcing
Conversion System Operations
Outputs Distribution
Place Utility
Form Utility
Time Utility
22
The Value Chain
23
The Value Chain
Inbound Logistics
24
The Value Chain
Inbound Logistics
Operations
25
The Value Chain
Inbound Logistics
Outbound Logistics
Operations
26
The Value Chain
Inbound Logistics
Outbound Logistics
Operations
Marketing Sales
27
The Value Chain
Inbound Logistics
Outbound Logistics
Operations
Marketing Sales
Service
28
The Value Chain
Firm Infrastructure
Inbound Logistics
Outbound Logistics
Operations
Marketing Sales
Service
29
The Value Chain
Firm Infrastructure
Human Resource Management
Inbound Logistics
Outbound Logistics
Operations
Marketing Sales
Service
30
The Value Chain
Firm Infrastructure
Human Resource Management
Procurement
Inbound Logistics
Outbound Logistics
Operations
Marketing Sales
Service
31
The Value Chain
Firm Infrastructure
Human Resource Management
Procurement
Technology Development
Inbound Logistics
Outbound Logistics
Operations
Marketing Sales
Service
32
The Value Chain
33
The Value Chain
34
The Supply Chain
Raw mtls
Supplier
Distr
Whole- saler
Retailer

• Mfgr

End User
35
The Supply Chain
Raw mtls
Supplier
Distr
Whole- saler
Retailer

• Mfgr

End User

• Dell

• Amazon.com

• Downloadable Software