Exam 1 Study Guide - MGT 4000 Fall 2008 Takeda The Concepts...

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‘MGT 4000 Fall 2008 Takeda The Concepts of Competitive Strategy and Competitive Advantage – 1 Competitive Strategy deals exclusively with a company’s business plans to compete successfully o Specific efforts to please customers o Offensive and defensive moves to counter maneuvers of rivals o Responses to prevailing market conditions o Initiatives to strengthen its market position o Narrower in scope than business strategy Competitive Advantage firms strategy gives it an edge o good product at a low price o superior product worth paying for o best value product The Concept of a Company Value Chain – 2 (p.110) All the various activities that a company performs internally. The value chain identifies the primary activities that create customer value and the related support activities Consists of two broad categories o Primary Activities – foremost in creating value for customers Supply chain management Operations Distribution Sales & Marketing Service Profit Margin o Support Activities – facilitate and enhance the performance of the primary activities Product Research and Development (R&D), Technology, and Systems Development Human Resources Management General Administration o These identify the major components of its cost structure Value Chain for an entire industry o Supplier-Related: Activities, costs, and margins of suppliers o Company Value Chains: Internally performed activities, costs, and margins o Forward Channel Value Chains: Activities, costs, and margins of forward channel allies and strategic partners AND buyer or end-user value chains. Identifying Company Resource Strengths and Competitive Capabilities – 1 Resource Strength: something a company is good at doing or an attribute that enhances its competitiveness in the market place o A skill, specialized expertise, or competitively important capability o Valuable physical assets o Valuable human assets and intellectual capital o Valuable organization assets o Valuable intangible assets o An achievement or attribute that puts the company in a position of market advantage 1
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o Competitively valuable alliances or cooperative ventures Competitive Capabilities: a company’s resource strengths represent competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace Competencies, Core Competencies, Distinctive Competencies and Competitive Capabilities – 4 Competencies: Something an organization is good at doing. Almost always the product of experience, representing an accumulation of learning and the buildup of proficiency in performing an internal activity. o Ex. just-in-time inventory control or designing an unusually appealing and user-friendly website Core Competence: A proficiently performed internal activity that is central to a company’s strategy and competitiveness. Often knowledge-based, residing in people and in a company’s intellectual capital and not in its assets on the balance sheet.
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