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COMPETITIVE ADVANTAGE
 It is anything that a firm does especially well
ALTERNATIVE APPROACHES compare to rival firms.
TO ACHIEVING  A firm must strive to achieve sustained
competitive advantage by:
COMPETITIVE ADVANTAGE
 Continually adapting to changes in external trends
and events and internal capabilities, competencies
and resources;
 Effectively formulating, implementing and
evaluating strategies that capitalize upon those
factors.

SELECTING BUSINESS STRATEGIES FOR

VALUE & COMPETITIVE ADVANTAGE COMPETITIVE ADVANTAGE
 In specific terms, developing or crafting
 Essentially, competitive advantage arises from
the customers’ perception of value for money. business strategies involves the following
 The key point to understand is that value comes
specific tasks:
from: a. Forming responses to changes in industry and
 a low price, or competitive conditions, buyer needs and preferences,
 features of the product (or the way it is made available to economy, regulations, etc.;
customers) – both real and imagined – that make the b. Crafting competitive moves to produce sustainable
customer willing to pay a higher price, or competitive advantage;
 a combination of price and product features that gives
c. Building competitively valuable competencies and
„best value‟ to a group of customers in the market.
capabilities;
d. Uniting strategic initiatives of functional areas; &
e. Addressing strategic issues facing the company.

STRATEGIC CLOCK
 Bowman’s Strategy Clock is a comprehensive and easy
to use strategy tool that provides options for positioning
within a market based around price and perceived value.
 The strategic clock has two dimensions: price and
perceived benefits. Price can be shown on a scale
ranging from „low‟ to „high‟. Similarly, perceived benefits
can be shown on a scale from „low‟ to „high‟.
 The ‘clock’ consists of a series of business strategies.
 The different business strategies can be grouped into:
 five business strategies that might enable a firm to gain a
competitive advantage, and
 strategies that will fail because they cannot provide competitive
advantage.

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PORTER’S GENERIC STRATEGIES FOR
COMPETITIVE ADVANTAGE
 Porter has suggested three strategies for
sustaining competitive advantage over rival firms
and their products or services.
 These strategies, which are similar to some
shown on a strategic clock, are:
 a cost leadership strategy
 a differentiation strategy
 a focus strategy
TARGET MARKET
 It refers to a group of potential customers to
whom a company wants to sell its products and
services.
 This group also includes specific customers to
whom a company directs its marketing efforts.
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USING A STRATEGIC CLOCK
 A strategic clock can be used to consider
different business strategies for gaining
competitive advantage, based on providing a
combination of price and perceived benefits.
 The five broad groups of business strategy that
might succeed are:
 a „no frills‟ strategy (position 1 on the clock)
 a low price strategy (position 2)
 a differentiation strategy (position 4)
 a hybrid strategy (position 3)
 a focused differentiation strategy (position 5)
 The leader is the entity that sells most products in
the market. Examples are Microsoft for PC operating
software and Coca-Cola for cola drinks.
 A challenger is an entity that is not the market
leader, but wants to take over as the market
leader.
 A follower is an entity that does not have any
ambition to be the market leader, and so follows the
strategic lead provided by the market leader (or
challenger). A follower will try to differentiate its
product.
 A nicher is an entity that targets a particular
market segment or market niche for its product,
and does not have any strategic ambition to gain a
position in the larger market.
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COLLABORATION
 It is the situation of two or
more people working together
to create or achieve the same thing. ALTERNATIVE
(Cambridge Dictionary)
 In some situations, companies might be
DIRECTIONS &
able to achieve competitive advantage METHODS OF
through collaboration with:
 suppliers or customers in the value DEVELOPMENT
network/value system
 other business entities in the value network
 some other competitors.

TYPES OF STRATEGIC DIRECTIONS

STRATEGIC DIRECTION

 It is a course of action that leads to

the achievement of the goals of an
organization‟s strategy.
 It is a set of foundational ideas, a
mechanism that provides consistency
to the strategy over time.

TYPES OF STRATEGIC DIRECTIONS ANSOFF MATRIX

 It is also known as the Ansoff Product/

Market Growth Matrix.
 It is a strategic planning tool used to
analyze and generate four alternative
directions for the strategic development
of a business or corporation.
 The Ansoff Matrix was named after Igor
Ansoff (1957) after it was published in the
Harvard Business Review with an essay
named “Strategies for Diversification”.

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MARKET PENETRATION
 It is sometimes called a ‘protect and
build’ strategy.
 It is by far the most obvious strategic
direction for a company because it tries to
gain market share by building on
its existing markets with its existing
product range.

MARKET DEVELOPMENT PRODUCT DEVELOPMENT

 In marketing, this is also referred to
as product line extension.
It involves opening up new
 It is the approach in which
markets for existing products.
organizations deliver either new
It works by offering the products or modified products
organization‟s existing in existing markets.
products and services in
completely new markets.

DIVERSIFICATION METHODS OF STRATEGIC DEVELOPMENT

 ‘Growth Strategy’ refers to a strategic

plan formulated and implemented for
 It is by far the riskiest strategic
expanding firm‟s business.
option of the Ansoff Matrix.  Every firm has to develop its own growth
 It is a strategy that radically shifts strategy according to its own characteristics and
the scope of the organization by environment.

entering completely new markets

with completely new products.

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GROWTH THROUGH ACQUISITIONS

INTERNAL GROWTH OR MERGERS

 It refers to the growth within the  Perhaps the acquirer is looking to grab a new
organization by using internal resources. product line, add some additional facilities, and
enter a new market, or gain expertise and
 Internal growth strategy focuses on intellectual property.
developing new products, increasing  The bottom line is a strategic merger yields value
efficiency, hiring the right people, better for both the acquired and the acquiring firm.
marketing etc.  To reluctantly use a hackneyed phrase, it‟s a
 Internal growth strategy can take place “win-win” for both parties.
either by expansion, diversification and
modernization.

DIVERSIFICATION AND INTEGRATION/ ASSESSMENT OF BUSINESS STRATEGIES

JOINT VENTURES AND STRATEGIC
ALLIANCES  Johnson and Scholes suggested that when judging
the strengths or weaknesses of a proposed strategy,
 Integration/ Strategic alliance/ joint the strategy should be evaluated for its:
venture is an agreement between two or  Suitability: Does it address the strategic
more firms from different countries to requirements, given the circumstances and the
cooperate in any value-chain activity from situation?
 Acceptability: Does it address the strategic
R&D to sales.
requirements in a way that will be acceptable to
 It‟s when an independent firm is created significant stakeholders?
by at least two other firms.  Feasibility: Is it practical?

STRATEGY SELECTION STRATEGY SELECTION

 Formal evaluation:
 Learning and experience
 Where there is a free choice from several available
strategies, the selection might be based on a Learning is the acquisition of new ideas.
formal financial evaluation and strategic An entity might select a strategy that
evaluation of the expected returns and the risks, forces it to learn something new. This
over the long term as well as the short term.
might require a significant change in
behavior as well as skills.
 Enforced choice:
 In some cases, management might take the view
that they have no real choice, and that they are
„forced‟ to adopt a particular strategy.

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STRATEGY IMPLEMENTATION
 Ittakes the form of day-to-day actions
and relationships.
 Aspects of Strategy Implementation
 organization structure, including the
organization of processes and relationships
 managing strategic change
 implementing strategy through
combination of intended strategy and
emergent strategy.
STRATEGIC CHANGE
 Change refers to an alteration in a system
whether physical, biological, or social.
 Organizational Change is the alteration of
work environment in organization.
 It implies a new equilibrium between
different components of the organization-
technology, structural, arrangement, job
design, and people.
CORPORATE GOVERNANCE
 It is the interaction between various
participants (shareholders, board of
directors, and company‟s management) in
shaping corporation‟s performance and the
way it is proceeding towards.
 The relationship between the owners and the
managers in an organization must be
healthy and there should be no conflict
between the two
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ORGANIZATIONAL RELATIONSHIPS
AND IMPLEMENTING STRATEGY
 Plans are put into action by the coordinated
efforts of many individuals and groups
within the entity.
 The way in which plans are implemented
depends on:
 the nature of internal relationships: these are
relationships between different parts of the
a organization
 the nature of external relationships: in many
entities a significant amount of work is done by
other entities and individuals who are external to
the entity and not a part of it.
TYPES OF CHANGE
 Planned change (or proactive change)
 It is deliberate and intended.
 The entity makes the change to move from an
existing situation (or way of doing things) to a
new situation.
 Unplanned change (or reactive change)
 It happens in response to developments, events
and new circumstances that have arisen.
 The change is not intended in advance.
THE EXPECTATIONS OF STAKEHOLDERS
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THE EXPECTATIONS OF STAKEHOLDERS
 Employees expect to receive fair pay for the work
that they do.
 Customers have expectations about the nature of
the goods or services they receive from a company.
 Suppliers might expect to develop a good business
relationship with the company and collaborate on
achieving improvements in the value network.
 Communities might expect a company to provide
employment and economic prosperity by investing
in the local area
 The general public & government might expect
a company to show concern for the environment
and to reduce pollution and develop environment-
friendly ways of operating.
CONSEQUENCES OF UNETHICAL BEHAVIOR
 When business conduct is illegal or in
breach of regulations, there is a risk of
being „found out‟
 When businesses act illegally but in a
way that the general public considers
„immoral‟, there is a risk of action by the
government to makes such action illegal.
 Businesses that act in an unethical way
are also exposed to reputation risk.
CSR USUALLY MEANS THAT A COMPANY GOES
FURTHER THAN REQUIRED BY LAW IN ORDER TO:
 treat employees fairly and with respect
 operate in an ethical way and with
integrity, in all its business dealings with
customer, suppliers, lenders & others
 respect human rights
 sustain the environment for future
generations
 be a responsible neighbor in the community
and a good „corporate citizen‟.
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ETHICS IN BUSINESS IS GENERALLY ASSOCIATED
WITH THE FOLLOWING ASPECTS OF BEHAVIOR:
 Acting within the law
 Fair & honest dealing with suppliers and customers
 Acting fairly towards employees and showing due
concern for the welfare of employees
 Showing respect and concern for the communities in
which the business entity operates
 Showing respect for human rights, and refusing to
deal with any entities that do not show concern for
human rights
 Showing concern for the environment and the need
for sustainable businesses
CORPORATE SOCIAL RESPONSIBILITY
 It is the responsibility that companies
recognize for acting in a socially
responsible way.
 It generally refers to business decision-
making linked to ethical values,
compliance with legal requirements,
and respect for people, communities
and the environment.
EXAMPLES OF CSR COMPANIES
 Lego
 The toy company has invested millions of
dollars into addressing climate change and
reducing waste.
 Lego's environmentally conscious efforts
include reduced packaging, using
sustainable materials and investing in
alternative energy.
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EXAMPLES OF CSR COMPANIES BUSINESS PROCESS

It is any set of activities performed by a business that
 Google

is initiated by an event, transforms information,
 Google has demonstrated its commitment materials or business commitments, and produces an
to the environment by investing output.
in renewable energy sources and  Process change exists at various levels:

sustainable offices.  Automation – This means making existing operations

 The company‟s CEO, Sundar Pichai, is also
known to stand up against social issues
such as discrimination.
more efficient by automating work or computerizing work
previously done by hand.
 Rationalization – This involves streamlining standard
operating procedures, so that procedures become more
efficient.
 Business process redesign or design – It might combine
radical changes in processes to cut waste, and eliminating
repetitive paper-intensive tasks in order to improve costs,
quality and service.

HARMON’S PROCESS STRATEGY MIX

TECHNOLOGICAL CHANGE
& PROCESS CHANGE

 It is an increase in the efficiency of a product

or process that results in an increase in
output, without an increase in input.
 It usually involves the following stages:

 Invention - the creation of a new product

or process
 Innovation - the application of the
invention for the first time
 Diffusion - how fast others begin to adopt
the innovation

BUSINESS PROCESS REDESIGN PATTERNS

PRINCIPLES OF E-BUSINESS

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HOW THE INTERNET INFLUENCES INDUSTRY STRUCTURE

PRINCIPLES OF E-BUSINESS

 The objective of e-business is to increase

the competitiveness and efficiency of an
entity by using electronic information
exchanges to improve processes.
 E-business can change the nature of the
marketplace in which goods and services
are bought and sold.
 E-business also changes the nature of the
relationships with suppliers and
customers.

MAIN BUSINESS & MARKETPLACE

MODELS FOR DELIVERING E-BUSINESS STAGE MODEL OF E-BUSINESS

 Selling goods and services: „E-shopping‟

 Providing electronic auctions
 New intermediary companies

 Alliances of suppliers

 E-procurement
 Advertising

 Marketing

 Customer relationships

BARRIERS TO E-BUSINESS PROJECT

 It is defined as a “temporary endeavor with a

 Set-up Costs beginning and an end and it must be used to create
 Type of Business a unique product, service or result”. Further, it is
 On-going Operating Costs progressively elaborated. (Project Management
 Time to Establish the System Body of Knowledge, 3rd edition)
 No In-house Skills
 Examples:
 Development of software for an improved business
process
 Construction of a building or bridge
 Relief effort after a natural disaster
 Expansion of sales into a new geographic market

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CHARACTERISTICS OF A PROJECT PROJECT CONSTRAINTS

a. It has a specific purpose or goal which can be defined.
b. It is unique, and will not be repeated again in exactly the
same way as before.
c. It has a beginning and a definable end.
d. It consists of a series of linked activities that contribute
towards the desired goal.
e. A project has time constraints, with a target date for
completion.
 A project is often complex, bringing together a team of
individuals with different skills and from different
functional backgrounds or departments.
a. Scope Constraints. This relates to what the
project might achieve.
b. Time Constraints. There is often a scheduled
date or latest date for completion of the
project.
c. Cost Constraints. There is often a limit to the
amount of expenditure that a project is
allowed, and projects are expected to be
completed within the budgeted expenditure
limit.

CONTENTS OF A PROJECT CONTENTS OF A PROJECT

THE PROJECT MANAGER CONCEPTS OF PROJECT MANAGEMENT

 He/She is a person who has the overall  It is the application of knowledge, skills,
responsibility for the successful initiation, planning, tools and techniques to project activities to
design, execution, monitoring, controlling & closure meet the project requirements.
of a project.  The main tasks of project management are
 Duties and Responsibilities of the Project Manager
1. Develop the big idea
to ensure that the goals of the project are
2. Organize the project tasks achieved on time, within budget, and to the
3. Assemble the team required standard of quality or to the
4. Engaging stakeholders
5. Managing the money
required specifications.
6. Lead the team
7. Manage the handover

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GOOD LUCK
ON YOUR
FINAL EXAMS! 

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