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sustainingca_Presentation - Agenda Competitive Advantage...

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1 Competitive Advantage 2 Cornell University Agenda Types of competitive advantage. Threats to sustainability of advantage. Barriers to protect advantage. 3 Cornell University To achieve a competitive advantage a firm must have resources that either (1) lower costs or (2) increase quality relative rivals, i.e. a firm must create more value than rivals (add value). AND The firm must be able to retain these resources and avoid imitation and substitution of them. How do firm resources provide a competitive advantage? 4 Cornell University Capabilities advantage – Higher profits that result from functions that you perform better than rivals Toyota produced cars with far fewer defects than GM in the 1980s Positional Advantage – Higher profits that result not from what you do, but from your position in the market. City of Chicago announces it will build a new stadium across the street from your restaurant. Types of Competitive Advantage
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2 5 Cornell University Differences in profitability shrink over time. Threats to competitive advantage can be external: Imitation of resources Substitution of resources Or internal to the firm and its supply chain: Hold up Slack (threat to value capture & value added) Is Competitive Advantage Sustainable?
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