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Competitive Advantage

Todays competitive Advantage may be tomorrows albatross unless strategists attune themselves to change in underlying conditions -Clayton M. Christensen

Competitive Advantage
Competitive advantage is what enables a business organization to thrive. It is the objective of strategy. It is the combination of elements in the business model which enables a business to better satisfy the needs in its environment, earning economic rents in the process.

Competitive Advantage
First Mover Advantage In-Depth Industry Experience Established Data Advanced Market Share Building Entry Barriers5

Economies of Scale
Economies of Scale are the cost advantages that enterprises obtain due to size, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output. Often operational efficiency is also greater with increasing scale, leading to lower variable cost as well.

Economies of Scale
In the 1960s & 1970s, concept of competitive advantage often were predicted upon steep scale economies, and many tools of strategic analysis were built upon those economies. IBM with 70% market share, earned 95% of the main frame computer industry profit.

Economies of Scope
Economies of Scope are conceptually similar to economies of scale. Whereas 'economies of scale' for a firm primarily refers to reductions in average cost (cost per unit) associated with increasing the scale of production for a single product type, 'economies of scope' refers to lowering average cost for a firm in producing two or more products.

Economies of Scope
A second source of competitive advantage, intertwined with scale economies, has been product-line breadth. In 1970s, Caterpillars scope gave the company an unassailable advantage in construction equipment against smaller competitors such as Komatsu.

Competitive Strategies
Cost Leadership Strategy: The goal of Cost Leadership Strategy is to offer products or services at the lowest cost in the industry Differentiation Strategy:
The goal of Differentiation Strategy is to provide products that stand out from competitive offerings

Competitive Strategies
Innovation Strategy:
The goal of Innovation Strategy is to leapfrog other market players via the introduction of completely new or notably better products or services

Operational Effectiveness Strategy:


The goal of Operational Effectiveness as a strategy is to perform internal business activities better than competitors, making the company easier or more pleasurable to do business with than other market choices

Thank You

Bhavna Sarawagi Namit Arora Pratik Doshi Priyanka Garg Shantanu Agrawal Varnam Doshi