Enhancing Enterprise Competitiveness through Strategy and ...knowledgesocietyfoundation.com/images/Williams_D_2011_Enhancing... · Enhancing Enterprise Competitiveness through Strategy

August 2009

Densil A. Williams Department of Management Studies

UWI, Mona

Enhancing Enterprise

Competitiveness through Strategy

and Efficiency

Jamaica Computer Society Conference, April 15-16, 2011, UWI, Mona.

Contents

Firm Level Competitiveness

What does it really mean?

Common Competitiveness Drivers in Caribbean Firms

Generic Competitive Strategies

Where should Caribbean Firms be Located?

Risk involved in pursing Generic Strategies

Operational Efficiency and Competitiveness

Concluding Thoughts

Know the Industry Structure

Firm Level Competitiveness: What does it really mean?

Competitiveness at the national level is seen as a non zero-sum game.

All nations can achieve competitiveness if viewed through the lens

of improved productivity, not competition

Is this true at the firm level?

Firm Level Competitiveness: What does it really mean?

Enterprise competitiveness is multifaceted

Ability to export to an array of countries without preferential treatment

Ability to engage in FDI using local talents and skills

Ability to operate at international standards

Ability to earn above average return while competing with indigenous enterprises in the free market

Common Competitiveness Drivers in Caribbean Firms

Effective Risk Management (BNSJ, First Life)

Highly focused activities

Diversification to offset threats

Work Place Transformation and Upgrade HR (Jamaica Broilers)

Up-skill employees

Requisite training

Benchmark against international competition (Former Superplus group)

Broader world view

Good knowledge of the industry

Common Competitiveness Drivers in Caribbean Firms

Focus on Innovation, Marketing, Technology an Quality (Sandals, Superclubs)

Marketing was critical for Courts in its turn-around

LASCO innovative in its soy-based drink

ISO certification, mark of quality (Wray & Nephew)

Corporate Leadership (Grace Kennedy)

Central to drive change in the organization

Generic Competitive Strategies: Where should Caribbean Firms be Located?

Porter identified three (3):

Cost leadership

Differentiation

Focus

Differentiation

Cost Leadership

Generic Competitive Strategies: Where should Caribbean Firms be Located?

LOW COST DIFFERENTIATION

(Uniqueness)

Broad (Industry

Wide)

Cost Leadership Differentiation

Narrow (Particular

Segment)

Cost Focus Focused Differentiation

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Strategic Advantage

Generic Competitive Strategies: Where should Caribbean Firms be Located?

Risks from going Generic

Sustaining the Strategy

Technological changes nullify past investment and learning

Imitation narrows perceived differentiation

Erosion of strategic value due to industry evolution

Removal of defenses against competitors

How do you guard against these risks?

Operational Efficiency and Competitiveness

Efficiency and Innovation are important to maintain competitive advantage

Efficiency helps to create greater value, lead to lower cost and higher quality output

All areas of the value chain must be operated efficiently in order to maintain competitiveness

Operational Efficiency and Competitiveness

Source: Adopted from Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York : The Free Press

Operational Efficiency and Competitiveness

Attaining Operational Efficiency

Look at your current situation

How does my work processes match up with the industry standards?

Optimize business processes

Remove bottlenecks that reduce time to market products (Think BPR!!!!!!)

Operational Efficiency and Competitiveness

Upgrade assets to current industry standards

Helps to cut operational costs

Modernize business thinking

Try to be lean and focus on sharing production capabilities

Create new opportunities from outsourcing (Digicel with the top-up services to the corner shopman))

Operational Efficiency and Competitiveness

Dynamic efficiency is also critical

Quick and effective response to new developments in the industry

Each enterprise must address their own unique operational challenges

Concluding Thoughts

Enterprise competitiveness will require a mix of efficiency and good strategy

Each firm must understand the industry structure in which it

operates.

Porter’s five forces model Bargaining power of suppliers

Bargaining power of buyers

Threat of substitute products Threat of new entrants

Rivalry among competing firms