LCA National Conference Competitive Edge Andrew Hely IGT Australia

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LCA National Conference Competitive
Edge Andrew HelyIGT Australia  
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Outline

• What is a Competitive Edge?
• Criteria for a Sustainable Competitive Edge
• Why do we need a Competitive Edge?
• Distinctive capabilities
• Distinctive vs Reproducible Capabilities
• Commoditisation
• Personal views on gaining a Competitive Edge

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So what is a Competitive Edge?

• A clear advantage over the competition in terms
  of one or more elements of the marketing mix that
  is valued by potential customers.
•  
• An advantage that allows business to survive and
  grow against its competition over a long period
  of time.
•  

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What are the criteria for a Sustainable
Competitive Edge?

• Unique
• Difficult to replicate
• Superior to competition
• Valued by Customers
• Sustainable
• Application to multiple situations

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Why do we need a Competitive Edge?

• In todays world, customers want things quicker,
  cheaper and they want it their way !
• Competition never gets easier 
• Products tend to get commoditised in the long
  term

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Distinctive capabilities are the basis for a
Competitive Edge

• Things that cant be replicated by
  competitors, or, can only be replicated with
  great difficulty, are the basis for a sustainable
  competitive edge.

• Tangible
• IP rights eg. patents, trademarks, regd
  designs
• Exclusive licenses

• Intangible
• Strong brands
• Strong Leadership
• Organisational culture
• Teamwork ability
• Business processes
• Partnerships or alliances
• Good location

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Reproducible Capabilities

• Technical capabilities
• Financial capabilities
• Marketing capabilities
• Explicit knowledge capabilities
• Non-exclusive licenses
• Reproducible capabilities Zero Competitive
  Edge.

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Distinctive vs Reproducible Capabilities

• Focus on distinctive capabilities that allow you
  to differentiate yourself !
• The key is the ability to separate yourself and
  your product or service, from that of your
  competitors.
• Distinctive capabilities need to be combined with
  speed !!

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Commoditisation

• Commodity
•   A product thats completely undifferentiated.
•  
• Commoditisation
•   Where a product becomes less differentiated, so
  that buyers dont care who they buy from.
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• Key Impact
•   Reduces the pricing power of the producer - if
  products become more alike from a buyer's point
  of view, theyll tend to buy the cheapest.
•  

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Commoditisation

• How do you avoid it ?
•   Need to be able to differentiate products with
  something unique, not easily copied by
  competitors, and which is valued by
  customers..anything to convince customers not to
  buy the cheapest product.
•   ie. you need a Competitive Edge !
•  
• Whats the alternative ?
•   Compete on price.

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Commoditisation Example PC Market

• Initial differentiation with manufacturers having
  different proprietary hardware and software
  (operating system)
• Looked different, ran different software, had
  different capabilities
• Growth market differentiation various
  Competitive Edges
• Market matured, standardized, and largely
  commoditised PCs
• Now little differentiation.. therefore compete
  on price.
•  

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Commoditisation -Organisations who have adapted

• Dell Computers
• Commoditised global PC hardware environment with
  extreme price competition
• Dell developed their Competitive Edge in sales
  distribution took out the middle man !

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Commoditisation -Organisations who have adapted

• Microsoft
• Early recognition of PC hardware becoming a
  commodity
• Concentrated on software where they saw a
  sustainable Competitive Edge
• Now the unrivalled leader in PC operating system
  software...higher margins due to competitive
  edge !
• Bill Gates If you possess the market.you
  eventually possess the profits.

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Personal views on gaining a Competitive Edge

• Build a strong team culture
•  Culture of commitment by passionate employees
•  Look for opposites in building your teams
•  Look for the right attitude rather than
  technical excellence
• Keep your management structure flat and dont
  build hierarchies or silos
• Look for team members you trust and enjoy working
  with
• Dont forget to have fun as well !

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Personal views on gaining a Competitive Edge

• Empower staff, make them accountable, but
  encourage innovation
•  Share knowledge
•  Be open and honest about performance
•  Praise publicly, criticize privately
•  Encourage staff to try new things and make
  mistakes. the only way to learn. the best in
  any discipline are those who handle mistakes the
  best !
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Personal views on gaining a Competitive Edge

• Focus on the process, not the outcome
•  Break things down into small pieces(chunk it).
  literally one step at a time
•  Look after the small things and the big things
  look after themselves.
• Understand the competition, but dont obsess.
• Focus on whats important, ignore distractions

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Personal views on gaining a Competitive Edge

• Lead with visibility, selflessness and conviction
•  Dont lead from your ivory tower must be
  visible
•  Stay in touch with the business without
  micro-managing
•  Try and make your staff look good, not you !
•  Look for fair outcomes in business and be
  generous with staff
•  Have an open mind to new ideas
•  Dont take yourself too seriously..youre only
  one cog in the wheel !
• Remember, the tone starts at the top!
• Above allbe yourself !

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IGT AustraliaVision Values
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Thank you!