Sources of Competitive Advantage from a Global Strategy
A well-designed global strategy can help a firm to gain a competitive advantage. This advantage
can arise from the following sources:
Economies of scale from access to more customers and
Generic Strategies and Industry Forces
Cost Leadership Differentiation
Ability to cut price Customer loyalty can
Total Debt to Total Assets
Pre-tax Return on Net
Pre-tax Return on Assets
Business Vitality Prof
Buyers are fragmented (many, different) - no buyer has any particular
Most consumer products
influence on product or price
Producers supply critical portions of buyers' input - distribution of Intel's relationship with PC
3.8 Marketing Research
We will continue to subscribe to Southern California Research Institute to better understand
demographic and psychographic data for our region. Additional research will involve tracking
competitive activities, gathering data on key
The joint venture is controlled through negotiations and coordination processes, while each firm
would like to have hierarchical control .
Foreign Direct Investment
Foreign direct investment (FDI) is the direct ownership of facilities in the target count
4.5 Contribution Margin
Contribution margins should increase as a result of these factors:
1. Increased efficiencies and revenue through specialization.
2. Increased efficiencies through use of our available technology.
3. Economies of scale from growth a
Increasing use of software - Tax software is one of our major competitors and continues to erode
revenue from individual clients with simple returns. This includes products produced by Intuit with
their "Turbo Tax" line and Block Financial with their "Kip
Diagram of Porter's 5 Forces
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forw
Barriers attributable to the recipient's external environment and constraints
Furthermore, even when the transfer is successful, there often is a temporary drop in performance before
the improvements are seen. During this period, there is danger of losin
Primary Value Chain Activities
The goal of these activities is to create value that exceeds the cost of providing the product or
service, thus generating a profit margin.
Loss of key resources - Losing key individuals in the firm could result in lost accounts or lost
areas of expertise. We need to review our "Stage 2" strategy if any person in the firm should not be
able to perform their function.
Online tax services - Com
Porter's Diamond of National Advantage
The individual points on the diamond and the diamond as a whole affect four ingredients that lead to a
1. required for manufacturing a product is highly specialized, these assets cannot easily be
sold to other buyers in another industry. Litton Industries' acquisition of Ingalls Shipbuilding
facilities illustrates this concept. Litton was successful in the
ARMOUR (Merged in 1968 with General Host; in 1969 by Greyhound; 1983 CHEVRON (Not listed
sold to ConAgra)
AMERICAN SUGAR REFINING (Renamed AMSTAR. In 1967 =320)
Leveraged buyout and sold in pieces)
PULLMAN, INC (Acquired by Wheelabrator Fr
Once the discrete activities are defined, linkages between activities should be identified. A linkage
exists if the performance or cost of one activity affects that of another. Competitive advantage may
be obtained by optimizing and coordinating linked ac
W-O strategies overcome weaknesses to pursue opportunities.
S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to
W-T strategies establish a defensive plan to prevent the firm's weaknesses from
(2) major law firms
(2) brokerage firms
2. Train the entire staff to understand, appreciate, and reinforce their role in marketing the firm.
3.3 Financial Objectives
1. Revenues of $1.6 million by year-end to realize a growth rate of 8.25% compared to
The competition engendered by a Threat of Substitute comes from products outside the industry.
The price of aluminum beverage cans is constrained by the price of glass bottles, steel cans, and
plastic containers. These containers are substitutes, yet they
services in lieu of the services we offer. This client type may consider these preparers on the basis
of "self preparation avoidance" rather than from seeking proactive advice and council.
Software - Increasing competition from individual software, partic
management and planning process. Our best clients value their time and resources, and seek to
minimize their tax obligations. They do not like negative surprises. They realize and appreciate the
value in the services we offer, along with the lost opportun
measure; the trend is to define industries in terms that convey more information than distribution of
If rivalry among firms in an industry is low, the industry is considered to be disciplined. This
discipline may result from the industry's
4.2.2 Sales by Segment
Our most important markets are our "large" and "growth" business clients. We have made strides
to focus on revenues from these more profitable and faster-growing segments. This lowers the
dependency on our "individual" client base,
Being perceived as a non-progressive, "too traditional" firm and maybe overlooked as a viable
option for new clients.
Some individuals within the professional staff do not have an understanding of or a commitment to
the marketing activities of the firm.
Direct sales of books are billed to credit cards and drop shipped. The magazine is an ideal vehicle
to promote these sales.
Future sales are planned directly over the internet from the AIB website.
5.2 Sales Strategy
Our combined sales strategy of samplin
artists about artistic principles in everyday business and will encourage interaction among artists
as business people. Our mission is to promote the concept of "community" in the workplace.
1.3 Keys to Success
The keys to success are:
This book from The Wharton School goes beyond simple static analysis frameworks and views
strategy in the dynamic competitive environment encountered in the real-world.
Part I discusses the rapidly changing nature of competitive advantage as the line betw
expanded facilities will be needed for the first few years of the plan. All business, management and
editorial functions will be performed there. All printing, mailing, warehousing, and fulfillment is
The Group Publishing will pub
3.7.1 Services and Service Marketing
We need to fulfill the promise we make to each client - to provide them the resources they need to
reach their business and personal financial goals, with unfaltering confidence in our firm
throughout that process and,
Global Structure: Country manager acts as an ambassador and administrator. In a global
firm there usually are business directors who oversee marketing and sales. The role of the
country manager becomes one of a statesman. This person usually is a local w