...Explain what is meant by sustainable competitive advantage..(SCA or just CA) A CA can be described as ‘an advantage a firm has over a competitor or over a group of competitors within the same market or industry’ (Kay 1993). It must be however, a relative advantage, which is to say that it should be compared to the competition. For example, Apple’s brand image is an advantage, because the logo is instantly recognisable, and could call itself more recognisable than competitors such as Blackberry or Nokia. Jack Welch (formerly of GE) said that ‘if you don’t have a CA, then don’t compete.’ This quote highlights the importance of a CA in business terms, and shows how it can be the difference between surviving in a market, or dominating in a market. The development of the CA is interesting; and it can be split into three main stages. Initially, the development of a CA was thought to be down to leadership; if a firm had a successful leader, then they would make successful decisions that would benefit the firm. However, in 1980, Michael Porter developed a theory which toppled this. Using his ‘5 Forces Model’, Porter believed that a firm could create a CA through differentiation (thus nullifying the threat of substitutes and the bargaining power of consumers) and/or through low costs (nullifying the threat of new entrants and suppliers.) Porter believed that by analysing the external environment, a firm could pick a good industry to enter and succeed in. This strategy in...
Words: 889 - Pages: 4
...Ab/Inbev: a Sustainable Competitive Advantage ! Anhueser-Busch/InBev: A Sustainable Competitive Advantage! ! Operations Management is a key component in the success of any firm. The textbook outlines ten critical areas to focus on for Operational Managers--many firms have developed these one or two of these areas into a competitive advantage. One firm, Anhueser-Busch/InBev has successfully incorporated all ten areas of focus and developed them into a legacy of quality and a sustainable competitive advantage. This focus on Operations Managemnt has lead to Ab/ InBev's reputation for quality, and their continued dominance as a global brewery.! Design of Goods! ! The design of goods/services defines a firm, and sets them up for success (or failure) in the market. In order to design a superior product, firms must first understand their customer— what their needs and requirements are. Anheuser-Busch/InBev has focused on developing a diverse portfolio of global brands to satisfy a myriad of customer needs; a few of their more recently-developed beers are actually based on customer suggestions and recipes. The AB/ InBev portfolio ranges from low-cost products such as Busch (which focuses on a costleadership strategy), while domestic brands such as Budweiser and Bud Light are a force to be reckoned with in the North American markets. Other brands such as Hoeegarden and Leffe appeal to craft beer consumers as well as global markets (a differentiation strategy). By customizing products...
Words: 321 - Pages: 2
...! Anhueser-Busch/InBev: A Sustainable Competitive Advantage! ! Operations Management is a key component in the success of any firm. The textbook outlines ten critical areas to focus on for Operational Managers--many firms have developed these one or two of these areas into a competitive advantage. One firm, Anhueser-Busch/InBev has successfully incorporated all ten areas of focus and developed them into a legacy of quality and a sustainable competitive advantage. This focus on Operations Managemnt has lead to Ab/ InBev's reputation for quality, and their continued dominance as a global brewery.! Design of Goods! ! The design of goods/services defines a firm, and sets them up for success (or failure) in the market. In order to design a superior product, firms must first understand their customer— what their needs and requirements are. Anheuser-Busch/InBev has focused on developing a diverse portfolio of global brands to satisfy a myriad of customer needs; a few of their more recently-developed beers are actually based on customer suggestions and recipes. The AB/ InBev portfolio ranges from low-cost products such as Busch (which focuses on a costleadership strategy), while domestic brands such as Budweiser and Bud Light are a force to be reckoned with in the North American markets. Other brands such as Hoeegarden and Leffe appeal to craft beer consumers as well as global markets (a differentiation strategy). By customizing products to various consumer tastes, they are able to obtain...
Words: 978 - Pages: 4
...which services and goods move from the vendor to the consumer. As we have learned in class, the channel can be direct, directly from the vendor to the consumer, or there can be intermediaries and several connections, such as wholesaler, distributor, agents, and retailers. The distribution channel is also referred to as the marketing channel. Michael Porter defines competitive advantage as the ability of one firm to outperform its rivals by establishing a difference and preserving it. The results of having an advantage over other firms in the market are more customers which lead to higher sales and more profits. Product offered, firm’s cost structure, consumer support and distribution network are examples of ways in gaining competitive advantage in the market. Rosenbloom define sustainable competitive advantage as “a competitive edge that cannot be quickly or easily copied by competitors. In recent years, it has become far more difficult for companies to attain such an advantage through product, price, and promotion strategies” (Rosenbloom, 2004). Another way for firms to gain competitive advantage is through their distribution channel by using Porter’s Five Forces (rivalry, threat of substitutes, buyer power, supplier power, and threat of new entrants and entry barriers). We will be focusing on strategic alliance and direct channel. Strategic alliance is defined as the relationship created between firms where their knowledge is combined to increase sales and reduce...
Words: 799 - Pages: 4
...It has been said that there is no such thing as a sustainable competitive advantage. Do you agree? Why or why not? I Disagree First what is ment by competitive advantage and maintaining a Sustainable, competitive advantage? Competitive advantage is gained when a firm acquires attributes that allow it to perform at a higher level than others in the same industry. Sustainable, competitive advantages are advantages that are not easily copied and, thus, can be maintained over a long period of time. The competition must not be able to do it right away or it is not sustainable. In other words a sustainable competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources or access to highly trained and skilled personnel human resources. It is an advantage (over the competition), and must have some life; the competition must not be able to do it right away, or it is not sustainable. It is an advantage that is not easily copied and, thus, can be maintained over a long period of time. Competitive advantage is a key determinant of superior performance, and ensures survival and prominent placing in the market. Superior performance is the ultimate, desired goal of a firm; competitive advantage becomes the foundation. It gives firms the ability to stay ahead of present or potential competition and ensure market leadership. In 1991, Jay...
Words: 954 - Pages: 4
...BIS5101 Strategic IT-Management Prof. Dr. Karl-Heinz Rau WS 2013/14 Term Paper Topic: How Companies Could Achieve Sustainable Competitive Advantage Gahn, Philip MACFA, ID# 309601 gahnphil@hs-pforzheim.de Kominek, Lukas MACFA, ID# 300953 komluk@hs-pforzheim.de Wenz, Eugen MACFA, ID# 300636 weneug@hs-pforzheim.de th Submission date: November 2 2013 2 Table of Contents 1 Purpose and Structure ......................................................................................... 5 2 Definition and Origin of Competitive Advantage .............................................. 6 3 Approaches and Methods to Achieve Competitive Advantages......................... 8 3.1 The Traditional Approach According to Porter ........................................... 8 3.1.1 Cost Leadership ................................................................................. 10 3.1.2 Focusing on Priorities ........................................................................ 10 3.2 Modern Approaches .................................................................................. 10 3.2.1 The Strategy as a Compilation of Simple Rules ................................ 11 3.2.2 The Blue Ocean Strategy ................................................................... 12 4 Ways to achieve Sustainable Competitive Advantage...................................... 13 5 Conclusion ............................................................................
Words: 3103 - Pages: 13
...|Producing sustainable competitive advantage through the | |effective management of people | | | | | Impressive remarks The author points out thirteen practices for managing people in order to achieve a competitive advantage. I am impressed by the way the author points out the importance of the workforce and how it is managed. The importance: As other sources of competitive success have become less important, what remains as a crucial, differentiating factor is the organization, its employees, and how they work. The author quotes Southwest Airlines as an example, which achieved competitive advantage from its very productive, very motivated, and by the way, unionized workforce. The author clearly points out, Culture, how people are managed, and the effects of this on their behavior and skills are sometimes seen as the “soft” side of business, occasionally dismissed. Even when they are not dismissed, it is often hard to comprehend the dynamics of a particular company and how it operates because the way people are managed often fits together in a system. Success, such as that achieved at Southwest, can be sustained and cannot readily be imitated by competitors. It is easy to copy one thing but much more difficult to copy numerous things. This is because the change needs to be more comprehensive and also because the ability to understand...
Words: 1349 - Pages: 6
...2 INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (2 ICBER 2011) PROCEEDING nd nd SUSTAINABLE COMPETITIVE ADVANTAGE FOR MARKET LEADERSHIP AMONGST THE PRIVATE HIGHER EDUCATION INSTITUTES IN MALAYSIA Loh Teck Hua KDU University College Business School Section 13 Campus, 76, Jalan Universiti, 46200, Petaling Jaya, Selangor DE ABSTRACT One of Malaysia’s economic goals is to become an education hub for the region. To achieve this, the Malaysian government had liberalised government policies resulting in the proliferation of Private Higher Education Institutions (PHEIs) including private Universities and University Colleges. As competition intensifies it becomes increasingly pertinent to ask “What sustainable competitive advantage should the Private Higher Education Institutions (PHEIs) have to achieve market leadership in the Malaysian education industry?” For the smaller PHEIs, it is a question of survival itself. This paper aims to provide a theoretical study of some of the key strategic activities of the leading PHEIs to answer this question. The literature review covering both foreign and local sources indicates three key factors of sustainable competitive advantage, i.e. branding and image, the physical aspects of higher education including location and facilities, and the mode of delivery. The paper will seek to identify these factors amongst the market leaders to ascertain the validity of the secondary data via critical analysis of their activities. The...
Words: 11731 - Pages: 47
...Drawing on the Resource Based View literature, evaluate whether and how Zara generates sustainable competitive advantage. A firm is said to have competitive advantage when its profits exceed the average of its industry and that of its rivals (Grant, 1991). According to Grant (1991) the RBV sees organizations as a collection of resources which when combined forms organizational capabilities. The goal of every business strategy is to achieve a sustainable competitive advantage. According to Collis and Montgomery (2008) a firm’s resources are responsible for its better performance while working in a dynamic environment which academics term as resource based view of the firm (RBV). The RBV analysis assumes that both resources and capabilities are important for better performance and explains why some firms perform better than others in an industry. Using RBV as a framework this essay aims to examine how ZARA generates sustainable competitive advantage. (Opening is good, you have been able to introduce theory that would be discussed the essay). “A fast fashion system combines quick response production capabilities with enhanced product design capabilities to both design latest products that capture the latest consumer trends and exploit minimal production lead times to match supply with uncertain demand” (Cachon and Swinney, 2011). Fast fashion is widely gaining recognition as being a key enabler for success for modern fashion retailers (Barnes and Lea-Greenwood, 2006). Fashion...
Words: 2205 - Pages: 9
...Drawing on the Resource Based View literature, evaluate whether and how Zara generates sustainable competitive advantage Based upon the analysis of the ‘ZARA: Fast Fashion’ case study and referring to literature on the resource based view along with other appropriate theory and frameworks, I will draw a conclusion as to whether Zara have been able to create a sustainable competitive advantage, focussing primarily on their core competences developed over time. The resource based view stems from the idea that today’s market environments are so unpredictable and fast moving that it is wiser to form a base for strategy on the internal resources and capabilities of a company, rather than focussing on the external market (Grant, 2008). To gain a competitive advantage a firm must implement a strategy consisting of valuable and rare resources not being employed by current or potential competitors. To create a sustainable competitive advantage a firm must have unique resources that are non-imitable and non-substitutable (Barney, 1991). Competences derive from the integration of resources, assets, routines and values (Prahalad and Hamel, 1990). They become ‘core’ competences when they strategically differentiate themselves from other organizations (Leonard-Barton, 1992), helping them build a sustainable competitive advantage. Prahalad and Hamel (1990) state that a world leading company is unlikely to have more than five or six core competences and it is crucial to note that, while...
Words: 1809 - Pages: 8
...strategy: 1) Goodness of fit test: How well does strategy fit the firm’s situation? 2) Competitive advantage test: does strategy lead to sustainable competitive advantage? 3) Performance test: does strategy boost firm performance?Testing a winning strategy: 1) Goodness of fit test: How well does strategy fit the firm’s situation? 2) Competitive advantage test: does strategy lead to sustainable competitive advantage? 3) Performance test: does strategy boost firm performance?Testing a winning strategy: 1) Goodness of fit test: How well does strategy fit the firm’s situation? 2) Competitive advantage test: does strategy lead to sustainable competitive advantage? 3) Performance test: does strategy boost firm performance?Testing a winning strategy: 1) Goodness of fit test: How well does strategy fit the firm’s situation? 2) Competitive advantage test: does strategy lead to sustainable competitive advantage? 3) Performance test: does strategy boost firm performance?Testing a winning strategy: 1) Goodness of fit test: How well does strategy fit the firm’s situation? 2) Competitive advantage test: does strategy lead to sustainable competitive advantage? 3) Performance test: does strategy boost firm performance?Testing a winning strategy: 1) Goodness of fit test: How well does strategy fit the firm’s situation? 2) Competitive advantage test: does strategy lead to sustainable competitive advantage? 3) Performance test: does strategy boost firm performance?Testing a winning strategy: ...
Words: 685 - Pages: 3
...Competitive Advantage and Pro Sports LaChandra Nicole Gaines MGMT 488 June 5, 2011 Ronald Morritt Competitive Advantage and Pro Sports Sustainable competitive advantage is the main purpose of an organization’s corporate strategy. Sustainable Advantage permits the preservation and development of a company’s competitive location within market (Strategy Fundamental: Determining Sustainable Competitive Advantage, 2010). Competitive advantage facilitates an organization to outlast against its competitors for an insignificant amount of time. Competitive advantage may originate in many forms. The competitive characteristic stems from the likeness of other alternatives (Strategy Fundamental: Determining Sustainable Competitive Advantage, 2010). I chose the Miami Heat as my pro-sport team to discuss competitive advantage. Because signing the very talented LeBron James to its 2010-2011 rosters, the Miami Heat established competitive advantage over all other professional basketball teams in the league (Waller, 2011). Alongside Dewayne Wade, the Miami Heat has the potential to bring home another championship to the city of Miami. There is a unanimous conformity that both Dewayne Wade and LeBron James are two of the best players in the NBA (Waller, 2011). The talents of James and Wade can dominate any team to secure a win for by making all the shots, rebounds, and playing aggressive defense. Both James and Wade signify sustainable competitive advantage for the reason that...
Words: 574 - Pages: 3
...EFFECT OF INFORMATION TECHNOLOGY IN THE CREATION AND MAINTENANCE OF SUSTAINABLE COMPETITIVE ADVANTAGE A. Talebnejad[1] Faculty of Management and Accounting Shahid Beheshti University Email: taleb149@yahoo.com Abstract -By the appropriate use of information technology, organizations can achieve sustainable competitive advantages. This technology because of including some characteristics such as being up-to-date, fast and precise and having different geographic localities all the time, has improved organizational efficiency, effectiveness and performance. In this article, we intend to investigate the role and effect of information technology in the creation and maintenance of sustainable competitive advantages from two different approaches: market-based approach and the resource-based approach. In the Market-based approach, meeting customer's and creating values for them, using information technology and the issue of achieving the competitive advantage and position in the market by organizations are addressed. In the resource-based approach, compatibility of the organization's resources such as those of information technology and organizational skills, particularly managerial ones are investigated. Amongst different organizational skills and resources, only managerial skills of information technology can create a sustainable competitive advantage. Keywords: Information Technology, Sustainable Competitive Advantage, Creation of Value for Customers, Resource-Based Approach, Market-Based...
Words: 4885 - Pages: 20
...POSITIONING FOR SUSTAINABLE COMPETITIVE ADVANTAGE: AN ORGANIZATIONAL LEARNING APPROACH John I. Njuguna1 Jomo Kenyatta University of Agriculture and Technology Juja, Kenya Abstract Organizational learning is increasingly being considered as one of the fundamental sources of competitive advantage within the context of strategic management. However, most literature has not clearly linked organizational learning with sustainable competitive advantage. This paper, therefore, explores and discusses the role of organizational learning in helping business firms to achieve sustainable competitive advantage. Specifically, it deals with how organizational learning process can be used to develop knowledge resources and capabilities that lead to sustainable competitive advantage. The main method used is analysis and integration of theories to develop a conceptual model. This paper proposes that, through organizational learning a firm can develop hard to imitate knowledge resources and capabilities (human capital as well as organizational capital) that create value which in turn lead to superior performance. INTRODUCTION In the 21 century business landscape, firms must compete in a complex and challenging context that is being transformed by many factors from globalization, frequent and uncertain changes to the growing use of information technologies (DeNisi, Hitt and Jackson, 2003). Therefore, achieving a competitive advantage is a major preoccupation of senior managers in the competitive and slow...
Words: 4920 - Pages: 20
...sources of sustained competitive advantage of a firm. To develop the strategy we need to analyze the firm’s internal strength and weaknesses (resource based model) as well as the external opportunities and the threat(environmental models). Environmental model is based on heterogeneity and mobility of the resources and assumes that all firms have the same strategy and the resources are heterogenic and mobile so the competitive advantage are not long lasting. Where as resource based model states that resources are immobile as well as heterogenic and can have long lasting competitive advantage. Firm resources are categorized into three types – physical capital resources, human capital resources and organizational capital resources. Some of the attributes of this resources can be used for developing strategies for increasing the effectiveness and efficiency of a firm. We need to specify conditions under which we can select resources which can be used as an competitive advantage. Competitive advantage means that a firm as a value added strategy over others and competitive advantage can only be sustainable if the other firms cannot duplicate that strategy. Once the strategy is being duplicate depending upon the strategy of the competitors or due to change in economic condition it is not longer sustainable. In an industry where firms have similar resources I,e resources are homogenous and mobile, it is not possible to have sustainable competitive advantage as they apply the...
Words: 1452 - Pages: 6
