Delayering Adhocracy and team-based organizations Project-based organizations Network structures Permeable organizational boundaries Barney’s (1991) VRIN-criteria: Valuable Rare Inimitable Non-substitutable H7: The sources and dimensions of competitive advantage College 3 Competitive advantage = when two or more firms compete within the same market, one firms possesses a competitive advantage over its rivals when it earns (or has the potential to earn) a persistently higher rate of profit. Verspreiden niet toegestaan | Gedownload door Elmira van den Broek ([email protected])lOMoARcPSD
The emergence of competitive advantage The changes that generate competitive advantage can be either internal or external. This figure depicts the basic relationships. Strategic innovationstend to involve pioneering along one or more dimensions of strategy. Creating customer value from new products, experiences or modes of product delivery New industries: some companies launch product which create a whole new market oBlue-ocean strategy = the creation of ‘unconstested marketspace’oExamples: My Space & Facebook in social networking New customers segments: creating new customer segments for existing product concepts can also open up vast new market spaces oExample: AirAsia in low-cost air travel, Nintendo in Wii games console New sources of competitive advantage: most successful blue-ocean strategies do not launch whole new industries, they introduce novel approaches to creating customer value. oReconfiguring the value chain: Zara in clothing, IKEA in furniture oReconceptualizing the product: Cirque de Soleil in circuses, Apple in computers oNew performance combinations: Low prices and style, H&M and Primark Sustaining competitive advantage against imitation Isolating mechanisms: describe barriers that limit the ex post equilibration of rents among individual firms. Causal ambiguity: when a firm’s competitive advantage is multidimensional and is based on complex bundles of resources and capabilities, it is difficult for rivals to diagnose the success of the leading firm. Uncertain imitability: the outcome of causal ambiguity, if the causes of a firm’s success cannot be known for sure, success is uncertain. Verspreiden niet toegestaan | Gedownload door Elmira van den Broek ([email protected])lOMoARcPSD
Sources of competitive advantage A firm can achieve a higher rate of profit over a rival in one of two ways: Either it can supply an identical product or service at a lower cost Or it can supply a product or service that is differentiated in such a way that the customer is willing to pay a price premium that exceeds the additional cost of the differentiation. The sources of cost advantage (cost drivers) Economies of scale oTechnical input-output relationships oIndivisibilities oSpecialization Economies of learning oIncreased individual skills oImproved organizational routines Production techniques oProcess innovation o
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