BusinessPolicyNotes03

BusinessPolicyNotes03 - 99 STRATEGIC MANAGEMENT Lecture 3...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 99 STRATEGIC MANAGEMENT Lecture 3 Dr. John Kraft Opening Case ·:·Dell's Competition Advantage Ml.L tH C o I¥ ig h tC l~ IIIIIIirI~ _ """--s. Internal Analysis 311 ~O~"'~.M"--" Competitive Advantage 312 ·:·Identifying the strengths and weaknesses of the company ·:·Managers must understand • The role of resources, capabilities, and distinctive competencies in the process by which companies create value and profit • The importance of superior efficiency, innovation, quality, and responsiveness to customers • The sources of their company's competitive advantage (strengths and weaknesses) ·:·Competitive advantage • A finn's profitability is greater than the average profitability for all finns in its indusby ·:·Sustained competitive advantage • A finn maintains competitive advantage for a number of years ~~~~2 Strategy, Resources, Capabilities, and Competencies 313 ~~~~3 Strategy in Action 314 ""~'TPl- " T _ _ " ~ ' ~~- 1·~~1~~~·~~} ,~~ ;·'l,',,, ,... Value Creation at Pfizer • ~o •.•••••• ...,~ .•••....----. 315 67 ~O~""~.""--.:l. 316 1 Strategy in Action Running Case Southwest Airlines Low Cost Structure ·:·Support Activities as a Source of Value Creation at Wal-Mart. ~O I1rM lCJl'*W l'-'-~.A I"' _ 3 '7 ~ O H o u g t la l. - n C - . - . y . A 1 1 rillt*-.....d. 318 FILM The Value Chain: Primary and SUDDort Activities WAL*MART t N.WJ1$1f1N it.t1!..P j:!Jt, ~ ~ P r i m o r y - ~ o e:am- j Infoimat"'!' j __ j Human infJwtn.JcI:Uf" ~ f ~ teSOUf'C8Ii '--{-- ~:_--'--- J'-- ~o •.•••.•••••• ~e:-.-n,.AlI",,*--S. 319 ~ o ~ ••••• ~ •••••rig ta _ .d . 3110 Value Creation per Unit Value Creation per Unit v = V.Iu. to consumer p - PrIce C - Costs of production V - P _ Consumersurplus p - c- ProfIt margin V - C - Value crellled V I pi--r- C~,C~ ~ ;::;.,:,'"J ' c··,, C. ==-r-lncJudes cost of capItal . ' . . . I per unit----_...-...:...::~-;' ..._.j C p Figure 3.2 U = Utility to consumer P - Price C - Costa of production U - P - Consumer surplus P - C_ Prof"rtmargin U - C - Value created l cJ'"',., .... ~ of ,,,,,,, I per unit • • • I v ~o~ •••.e-.-.r.""' _ 311' ~o •.•••••.••••.•e:-.-ny.M r1lt* _ 3112 2 68 Value Creation and Pricing Options Comparing Toyota and General Motors ~O~~~.M",,* _ There is • dynornic Option2: low« prien: ~ ta tio n s h ip .mong utility, to genef'tlt. demand pricing, tJem.nd. and eoatI. 3114 Toyota creates more utility Toyota c.n ch.rge higher prices Toyota i . more prof"rtobIe Toyota has. lower cost structure ToyctJI Figure 3.4 Superior value creation requires that the gap between perceived utility (U) and costs of production (C) be greater than that obtained by competitors....
View Full Document

This note was uploaded on 05/12/2010 for the course MAN 6721 taught by Professor Kraft during the Spring '10 term at University of Florida.

Page1 / 24

BusinessPolicyNotes03 - 99 STRATEGIC MANAGEMENT Lecture 3...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online