CBM Week 2 CORPORATE AND BUSINESS MANAGEMENT Susan Simei-Cunningham.

CBMWeek 2

CORPORATE AND BUSINESS MANAGEMENT

Susan Simei-Cunningham

CBMWeek 2

HOW TO ACHIEVE SUSTAINABLE COMPETITIVE ADVANTAGE

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Learning Outcomes

• By the end of this session the student will be able to:

• Discuss and critically evaluate approach to diagnosing and developing sustainable competitive advantage for an orgainsation

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Recap

• Last week we reviewed analytical tools .

• Value chain• McKinseys 7 ‘s• Porters competitive strategies and five

forces models

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COMPETITIVE ADVANTAGE

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As the environment is changing rapidly, organisation have to achieve competitive advantage.

Organisations therefore need to take care of three key areas;identifying sources of competitive advantageimplementing competitive advantagedefending competitive advantage

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HOW TO ACHIEVE SUSTAINABLE COMPETITIVE ADVANTAGE THROUGH COST LEADERSHIP

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The Value Chain Model

Porter Value Chain model is important to sustainable competitive advantage.

Why?

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Porter Value Chain Model

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The Value Chain Model

Value chain analysis describes the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization.

Therefore, it evaluates the value each particular activities adds to the organizations products or services.

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The Source of Competitive Advantage

Porter argues that the ability to perform particular activities and to manage the linkages between these activities is a source of competitive advantage. 

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Competitive Advantage

• Michael Porter, in his book, Competitive Advantage: Creating and Sustaining Superior Performance, 1985, states that competitive advantages exists when an organisation is able to deliver the same benefits as a competitor but at a lower rate.

• (Cost advantage)

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Competitive Advantage

• Delivering benefits that exceed those of your competitors.

• (Differentiation advantage)

• Together they are known as Positional Advantage

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A Model of Competitive Advantage

Distinctive Competencies

Resources

Capabilities

Cost Advantage or Differentiation

Advantage

Value Creation

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The Value Chain Model

The organisation is creates value by carrying out a series of activities that Porter calls the value chain.

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Achieving cost leadership through economies of scale • Cost leadership can be implemented in a

number of ways; companies can use economies of scale.

• How can I achieve this?

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Porters Five Forces and Cost Leadership• Where is the connection?

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Video

• http://www.bing.com/videos/search?q=sustaining+competitive+advantage&sk=&docid=278531212030&mid=1A1CABA79BD5E50160721A1CABA79BD5E5016072&FORM=LKVR#

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Tasks

• http://www.oup.com/uk/orc/bin/9780199216468/01student/mcqs/ch06/

• Read - http://ericbrown.com/competitive-advantage-and-the-resource-based-view-of-the-firm.htm

• Then complete• http://www.oup.com/uk/orc/bin/

9780199216468/01student/mcqs/

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Summarise

• There are many ways to achieve competitive advantage . Environmental analysis is crucial but all concepts and theories must be integrated to maintain the edge.

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Homework

• Research and write notes on achieving sustainable competitive advantage.