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3-7 and 3-10 Strategic Management

hbr nov dec 1996 sustainable competitive advantage

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Unformatted text preview: Nov-Dec 1996 Sustainable Competitive Advantage The provision of greater value for customers than competitors through means that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate. Valuable resources Rare resources Imperfectly imitable resources Nonsubstitutable resources Porter’s Five Industry Forces Competitive Rivalry A measure of the intensity of competitive behavior between companies in an industry Threat of New Entrants A measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry Threat of Substitute Products A measure of the ease with which customers can find substituted for an industry’s products Bargaining Power of Suppliers A measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs Bargaining Power of Buyers A measure of the influence that customers have on a firm’s prices Five Forces Framework: Five Important Considerations Barriers to Entry Supply side economies of Supply scale scale Network effects Customer switching costs Capital requirements Incumbency advantages Access to distribution Access channels channels Government policy Price Competition Price occurs when occurs Nearly identical Nearly products with low switching costs; switching Economies of scale Economies regimes; regimes; Rigid capacity; Perishable products; SWOT Analysis SWOT Strength...
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