This simple presentation discuss on resources and capabilities of the organization in order to meet competitive advantage, which divide into two types: Cost Competitive Advantage and Differentiation Competitive Advantage.
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Competitive advantage; when a firm
sustains profits more than average
for its industry, over the rivals. The
goal of much of business strategy is
to achieve a sustainable competitive
advantage.
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Two basic types of competitiveTwo basic types of competitive
advantageadvantage
• Cost advantage
• Differentiation
advantage
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A Model of Competitive
Advantage
Resources Capabilities
Distinctive
competencies
Cost Advantage
or
Differentiation Advantage
Value
Creation
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Are the firm-specific
assets useful for creating
a cost or differentiation
advantage and that few
competitors can acquire
easily.
• Patents and
trademarks
• Proprietary know-how
• Installed customer
base
• Reputation of the firm
• Brand equityRESOURCESRESOURCES
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Capabilities refer to the firm's ability to
utilize its resources effectively. An
example of a capability is the ability to
bring a product to market faster than
competitors. Such capabilities are
implanted in the routines of the
organization and are not easily
documented as procedures and thus are
difficult for competitors to duplicate.
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RESOURCES CAPABILITIES
These competencies enable innovation,
efficiency, quality, and customer
responsiveness, all of which can be
leveraged to create a cost advantage or a
differentiation advantage.
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Value CreationValue Creation
To achieve a competitive advantage,
the firm must perform one or more
value creating activities in a way that
creates more overall value than do
competitors. Superior value is
created through lower costs or
superior benefits to the consumer
(differentiation).