MAN4720CompAdv - o Competitors value chains may differ o Ex...

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Competitive Advantage Ch 3 pg 97-118 Cost Advantage: If cumulative cost of performing all value activities < competitors (current or potential) cost Strategic Value hinge on sustainability - Sustainability occurs when sources of a firm’s cost advantage are difficult for competitors to replicate or imitate Cost advantage leads to superior performance if the firm provides an acceptable level of value to the buyer so that its cost advantage is not nullified by the need to charge a lower price than competitors A firm’s relative cost position is a function of: 1. the composition of its value chain versus competitors
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Unformatted text preview: o Competitors value chains may differ o Ex. Airline Industry: TWA and United have similar value chains, whereas People Express’s value chain is different o IF value chains differ, the level of efficiency from the chains, will determine relative cost position o If value chains are different, differences lie within subset of activities, meaning firms can balance the effect of these differences on the relative cost position, by comparing the cost of these differing activities. 2. its relative position vis-à-vis the cost drivers of each activity...
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