Externa l Customer demand and preferences Input costs Technology disruptions

Externa l customer demand and preferences input costs

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Externa l: Customer demand and preferences. Input costs. Technology disruptions. Resources.
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Competitive Advantage Time Elements of Competitive Advantage Availability Cost Differentiation Flexibility Speed Continuous improvement ???
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Competing on Resources & Capabilities
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Competitive Advantage: Example: Wal-Mart Presence : World’s Largest Retailer - $482B USD Sales o 11,527 stores in 28 countries o Of every U.S. dollar, 8 cents is spent at Wal-Mart o U.S. Largest private employer: 1/223 Supply Chain : Lean, Mean Distribution Machine o Scale Sold: 30% of disposable diapers, 30% of hair care products o 120,000 items per store (avg) o IT : Point-of-Sale, Inventory, Vendor Management o Power vs. Suppliers: 26% Clorox, 21% Kellogg, 14% P&G Clear Offering : “Save money. Live better” 18
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Competitive Advantage: Example: ALDI Presence : Retailer - $83B USD Sales o 10,000 stores in 18 countries o 3 rd largest US Grocery Retailer after Walmart and Kroger) Speed, Efficiency, and Low Cost : o Fewer items per store (1300 – 1600): Small stores, high inventory turn-over o Limits # of brand name products: Increased negotiating power o Quality control o Lower prices: 17% below Walmart! Clear Offering : “Low, low price. It’s simple.” 19
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Competitive Advantage: Example: Honda SNOWBLOWERS Branches/canopy represents the widely different product markets to which the core competency has provided access MOTORCYCLES SMALL CARS LAWN MOWERS SUPERIOR R&D SMALL ENGINES CORPORATE CULTURE SUPERIOR MANUFACTURING SUPERIOR MARKETING & KNOWLEDGE OF CUSTOMERS Roots are underlying skills and capabilities that represent core competencies. Trunk is the core product, or the physical embodiment of the core competencies. The core product must be significantly related to benefits end-user receives.
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Competitive Advantage: Example: Apple Innovation structure and process Design process-> Simplicity, Connectivity, Use Product portfolio Quality Customer Service Teamwork Customer demand at higher relative prices Brand 21
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Competitive Advantage: Example: Zara Trend Forecasting: Market Research & CRM Integrated Design & Supply Chain -> Production in 2 weeks Managed Scarcity with Limited Production: o Fast Turnover -> Customer motivation, no inventory Store Utilization: Advertising, Location, Testing Experimentation -> Continual Improvement Customer loyalty
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Patagonia Case (2013) Background : - American clothing firm since 1973 - Ventura, CA based - $600M+ Revenue (Private B Corporation) - High-quality sporting wear & equipment at premium prices (+20%). - Costs are 10% higher than competitors. Only 1% on Marketing. Objectives : Cause no unnecessary harm and: - Be profitable! - Higher Gross Margins than competitors: Nike, VF, Columbia. - Achieve 10% annual sales growth for next 5 years (vs. 6%) - Stay true to environmental commitments Questions: - Are the above achievable? How? - How important is the environmental positioning to the firm’s business model?
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Patagonia: Vision & Mission (combined) : “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis”.
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