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    Fundamental Of strategi Managment

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    Fundamental Of strategi Managment

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    6 views10 pages

    FSM Unit 3

    Uploaded by

    Saini Lakhvindar singh
    Fundamental Of strategi Managment

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 10
    ah gy ibecone eee meen = ete € oF BUSING, CLASS 4th Yr BBA-ITM FACULTY NAME: IKANISHA R. SHAH _ SUBJECT ESM. UNIT 3 pAGENO. 01 t009 — Per eeennainr 4 BBA{ITM]SEM-VI (UNIT 3) se i E COMPETITIVE. ADVANFAGE.& ORE COMPETENCE {)2-Concept of Competitive Advantage ) Lon ayy > Significance \ o> Buildé itive Advantage— “+ Concept of Core Competence” + Difference between C.A. and C.C. + Acquiring Core Competence ~ SONCEPT OF COMPETITIVE ADVANTAGE petit is essenti ith rm in relation to its comy some others in marketing. And within given function, the supe ol ly may be rooted in different aspects of the functi - = cou Bey ‘om diffe ects; the competitors, ox, itmay ve have varie Superiority can also mean Derforms a given function differently distinct from the way other fjrms perform it. In either case, the firm gains a competitive advantage. oR I will be clear from the above gplanation that ineveloping a compétitive advantage, a firm basically figures out how it can’perform ‘a particular function or group of functions, eithés, Wi a superio: way, of in distinctive waygrelative “fo comipetiti ie OF 5 jas to be of value to’the giigin: and ch Without ig Yulfilled, no compet firm may be am hayemoré flexi tive advantage accrues to the firm, inction, In other words, there are two questions; fion in a or /distinctive way, compared to 1. Dol come function in a superior distinctive way co the visit dictonin-sometingin tems stone i jor.or. distineti f the firm Gomipetitive advantage is thus supstior.or. ctive competence of the Bi G “relative. aaeapetiien fp_some aren: The superior or distrcive cemnpstence im ing in Jue, The areas may include jnust mean something in terms of customer value, 1 =e a _ practically all fanctions/activitis, which business Tn aor con rence saarketing , R&D, production, finance, new sore management ele. The superiority.or distineion may “go Cover the resource and Capability dimension and factors like chology.) a 3 Outstanding leaders in any industry possess superiority/distinetion in sev functions/areas. === KANISHA R. SHAM : i — encima svasomante Al TSE ‘M-VIL ESM (UN ‘ Fow Mustrations et Us see 0 few iste “Toshib; bof \ NS of competitive ad Toshiba of exile Ite sRb&® variety and flexibility in prodction serves as « Mlexible manvfacturing.sysiem (FMS), ctvarieties of the given product in the 1: Por seupetitive advantage, Through a Toshiba Manutnetures differ rent produ competitive advantage o} ‘ x Sony: As a contrast to the Hexibilty of Toshiba, Sony epj@yS the advantage of low cost, in personal stereo plaYeys. The cost advantagetites through the offer of a globally standardized product'Kony’s Walkman fs} global product, offered all over the world, ignoring differentiatign. In other Words, in this product, Sony sells the same thing, the same. way, all overthe Wolld, The high quality and low cost of Walkman attracts customers the woRt@over, Sony is able to combine economy and high qudlity, by: simultahgously ‘achieving, high volume and standardization at a high quality leh has built'« competitive advantoge through this edge. = : Caterpillar: Caterpillar has bila competitive advantage’in its business’ of after-sales service. Caterpitng assures its arth moving equipment ‘trot casters th i wll teary service requirement and spare patie any part of the world, it iin 48 hours. This is a far superiot offer compared to its competitors. SIGNIFICANCR¢(® COMPETITIVE ADVANTAGE Ek up forthe strategy fr es ‘backup forthe strategy. It is the ft between the firm and the strategy it empldys. ~ a} ris closely linked to strategy. Infact the tw firm eannot have one.without the other. is a vital component of firm's strategy. © satay ta workive must hae relevant CA A, a firm cannot put into pli .go hand in hand'and STD! For strategy ta work we mi ‘© Without the relevant ° Evatt most nicely formulated strategy would fil when the firm Incks the C.A. required to make the strategy Ee S © Stiategy aiid'CA are related to one another, 4 el aie ‘without the other. Through en effective stteBy * and by putting CA into use the firm operates its 1 aan lace the chosen inndt have one CA ‘ae pnafYTM)SEM-Vl_FSM [UNTE3] | In the absence of CA, corporate objectives Wwouikl remzin elusive i and strategies would remair hollow | co Ina compelitive market, all firms do have some strate j wher The scene eigy ix always wives ‘around the CA of | © Scoring over compettion as well.cs defending against the competition would depend on a solid and substantial CA. In | pursuing opportunities as well as in deflecting threats and ‘vulnerability, the firm banks on CA =. | © In short, {CA is the heart of strat; | 3. CA is distinct from strength © A strength is not necessarily a C: | condition for a CA. = | © Only a strength that is superior or distigétive relative | | ‘competition car be CA See | | fo It results and manifest itself either as ‘¢e%t ad | | differelstiation advantage for the firm. <- + i © Every strength “neéd7not necessarily result in a cost or differentiation advantage. That is Shy’ every. strength does not y or the «> A, it is necessary but no¥ Sufficient age or a vee necessarily mean CA. Atthesame time, the business unit too, developsits own CA. ‘© The latter would often be unique to the particular business, tinay also be useful to the corporation as a whole. petitive advantage 6. Core skills of the corporation serve as.anchor for ¢ duilding: ce ; ‘© Usually a firm builds its major CA around its core skills. © Such CA which are built around the core skills usually prove t9 be enduring. a ‘© Whether a core skill of the corperation turns out into a full Nedge core competence or not; it does serve as the anchor for CA building. 4" BBA Corporate strategy buil a ‘ate strategy built on this purparate anchor carinot be replicated casily by y Lie differents ‘ nl any function 5 Integration De-integration/outs i ee sourcing Ss 3 ° ° ° o Supply chain expertise (lower input costs) o Strength in marketing channe!s o Mergers and acquisitions © Strategic alliances © Creation of entry barriers o Product differentiation o Brand dominance CEONCEPT OF CORE COMPETENCE "A company's core competence is something the orgasiz __ especially well in comparison to its competitors. “A core competence represents a competitive advantage ss company acquires expertise that competitors do not have. | 4 A core competence may be in the area of superior research ' developrses’, wrsclon by -xcepuonal customer service 3 i The cor Sept: sometimes misunderstood 08. i x perspective that rest 's the numbers of businesses @ ‘company can be in. | Firms wrongly assume tilat when. they adopt the concept of mre | competence, it compiz em to remcin with a single business. 1 “+ Jn reality the gompetence perspective helps the firm ‘o operate @ \ number of businesses by having one core skill. sinegges Will have @ linkage to the core skill. And, with two or ; large besket of business. + The § : three core” skills, a firm can have a very Examples of Gore Competence: : ‘ = Sony; Capability for miniaturization; it can Make any product tiny. » Philips: Optical media expertise. = i rs Capability for making Substrates, Coatings and ‘adhesives and in multiple ways : raking engines, which Gives it advantage in Jawn-owners and Generators Pan cos" combining tt = Honda: Capability for mal diverse products like cars, storcycles, = Dupont: Unique strengtn in chemical technology = JIT: Unique stren ath in electronics = NEC: nique agcoath in telecom, semi-Conductors and computing soi \ | ese aee, imaging and micropro 1 «Canon: Unique strength in optics, imaging a” cco | microprocessor control \ozether, they lend Canon a ‘antege i” : Giverse product as COPIES: 1, camer, «5 ———— \ = ™ 4th BBA(ITMJSEM-VIL_ESM (UNO 3) arcana al Attributes of Core Competence, Core competencs is fundamental, unique and inimitable sirengis of the firm that i. Provides the firm, the access to a variety of products/hnarkets. ii, Contributes significantly to customer benefits in the end products. Is an exclusive preserve of the firm and cannot be imitated easily by competitors. Core competence is largely a technological competence, a competence at the root technology in particular, This is because new businesses/new products are largely the result of tennclony) This is especially, true in today’s technoiogy-driven world, wheré~ technology is fast altering ' existing boundaries of businesses. The core competencies of these corporations are the outcome of their command over seyeral overarching | | technologies. icy | | i | i i 2 3. Corporations who enjoy a core cer: process / expertise keep gaining lasting advantage, proprietary products and fresh value enhancement. 4, In particular, for firms playing the busifiess game through the product route, core competence is very essential. Often, command over multiple tele- | through new and ing. technologies, (e.g, interrelated and overarc composite area, giving ri any-nique pi 5, Core competence. is a knowlédge base, whic! products with widely varying product missions. Core competency Idea does not restrict the number of Businesses. osy IFFERENCE BETWEEN‘COMPETITIVE AD’ h gives rise to a variety of WANTAGE AND CORE COMPETENCE. : : “SC [POINTS OP] COMPETITIVE co CORE COMPETENCE \ | DIFFERENCE ¢.." | ADVANTAGE. MEANING >>" (CA. means superior, | CC mean fundamental, eo “ distinctive competence in| unique & inimitable < snore related areas to. the | strength of the firm. ~ coe TETCE does imply © imply on joe: a cA, el IMPne CA does not imply Be foe ey ee SICCESS Gk does not constitote a[CC usually does : | gure success formula of | constitute sure success » formula the firm : BTITT it finn in E CA provides compeiitive|CC_ helps aI y Coe Sok in a given period vasetyof post 0 ily imit cannol IMITATION Teean be easly tated [1 cannot cain | A F Fes at the root ofthe} | GA Ties at the root of the [CC lies at | {ROooT dl = : oo es firm’s a different | businese ode EH ae as sah ——_|finetonsactvtestador | on | | Sony: CA-Low Cos, |S t, | Se Sales at same thing in ‘ony: Ce Microprocessor, uli | same way, | thi Standardization at igh : : level zg BEQUIRING CORE COMPETENCE C/ &b The abili ari e ability of firms to track and exploit the technological trajeete in imitating them. The notion of firm specific compete increasingly influential.amongst economists trying to. explain why firms are different, atid Row they change over time and alfo ‘amongst business praClitioners and consultants trying to.idéatify Ae eases of competitive success> is y ab In the 1990s, management began to shift interést from improvements in short term operational efficiency and. Sexbility (through de lyering, downsizing, outsourcing arid busings<:process re-engineering etc.) to = conver that. if taken’ too far the corporation could become the ot eee in businesses to adapt qu) ickly to changing oO hich oe ¥ ‘com encies feed into more than ODe.

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