...either Toyota or Honda and explain how the company has built and sustained competitive advantage in terms of the following: o Time o Investment o Interconnectedness of capabilities o Causal ambiguity Cite one Indian company that has built and sustained competitive advantage Honda: Honda Motor Company, Limited is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles. Honda has been the world's largest motorcycle manufacturer since 1959 and eighth largest automobile manufacturer in the world behind General Motors, Volkswagen Group, Toyota, Hyundai Motor Group, Ford, Nissan, and PSA in 2011. From a company who was a supplier of piston rings to Toyota and becoming their competitor there is a lot of story behind. A firm possesses a Sustainable Competitive Advantage (SCA) when it has value-creating processes and positions that cannot be duplicated or imitated by other firms that lead to the production of above normal rents. An SCA is different from a competitive advantage (CA) in that it provides a long-term advantage that is not easily replicated. As an example, Honda's expertise in engines. Honda was able to exploit this core competency to develop a variety of quality products from lawn mowers and snow blowers to trucks and automobiles. Time: Building resources usually takes time and continuous reinforcement, thereby giving first mover an advantage that is difficult to overcome. Honda was always a company which...
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...TiVo A case study analysis Group 5 Suthasina Chaolertseree (4802641060) Nutnaree Chaisirivichien (4802640583) Passamon Rattanawenawatee (4802641326) Jirawat Mahatraiphop (4802640302) David Eberle (5102940037) TiVo: A case study analysis MK 413: Group 5 1. Management vision There are four directions that TiVo’s management team can choose; each strategy has issues that the management team should consider before making a decision. The first direction is doing stand-alone business. TiVo can successfully compete with others in this type of business and earn high profits due to its unique offering. Standalone business also gives TiVo flexibility in developing its product technology and in enhancing its brand awareness, which allows TiVo to set higher prices. On the other hand, the company will have more marketing expenses in order to compete in the market since it needs to pay for advertising costs itself. Moreover, cable companies can become new potential competitors since they can outsource consumer electronics manufacturing to produce DVRs for them and distribute DVR devices to their subscribers. Doing Comcast and Advertising business may require TiVo to assemble its product equipment with another consumer electronics product and to use co-branding causing TiVo’s brand awareness to decrease. Moreover, the management team needs to put huge effort in turning advertising-related business into one of its core businesses. Furthermore, TiVo’s monthly average revenue per unit...
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...How might Porter’s Diamond explain why some locations produce firms with sustained competitive advantages in some industries more than others? Answer with reference to examples from at least two different industrial sectors. Answer. Porter’s diamond model is a model that can help understand competitive position of location in global competition that suggest a inherent reason why some firm within location are more competitive that other on a global scale. The argument is that the local are provided organization by specific factor, which created more potential competitive advantage for country or region. The Porter's model includes 4 drivers of local advantage, which are shortly described below: 1. Local factor conditions A company in local is exploited by factor conditions. Factor conditions can be seen as advantage factors such as workforce shortage, as a factor potentially strengthening competitiveness, this factor may heighten companies' focus on automation and zero defects. For example, in analyzing of film production industry in the Hollywood, has pointed out the local skilled labor, in the area. Also, resource constraints may encourage development of substitute capabilities; Japan's relative lack of raw materials has reduced and zero defect manufacturing. 2. Local demand conditions Focusing on the domestic market provide the primary driver of growth, innovation and quality improvement. The strong domestic market is stimulates by stat up the to a slightly expanded...
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...Internal Analysis Matter? Internal analysis helps a firm: • determine if its resources and capabilities are likely sources of competitive advantage • establish strategies that will exploit any sources of competitive advantage Traditional research on firm strengths and weaknesses • Theories of distinctive competence – General managers as distinctive competencies – Institutional leadership as a distinctive competence • Ricardian economics • Penrose’s theory of firm growth Research on the skills of general managers, institutional leaders, economic rents and firm growth have been brought together to develop a rigorous model to analyze a firm’s strengths and weaknesses: the resource-based view of the firm The Theory Behind Internal Analysis The Resource-Based View • developed to answer the question: Why do some firms achieve better economic performance than others? • used to help firms achieve competitive advantage and superior economic performance • assumes that a firm’s resources and capabilities are the primary drivers of competitive advantage and economic performance The Resource-Based View Resources and Capabilities Resources: • tangible and intangible assets of a firm » tangible: factories, products ; intangible: reputation • used to conceive of and implement strategies Capabilities: • a subset of resources that enable a firm to take full advantage of other resources » marketing skill, cooperative relationships The Resource-Based View Four Categories of Resources • Financial...
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...“VRIO framework is the tool used to analyze firm’s internal resources and capabilities to find out if they can be a source of sustained competitive advantage.” In order to understand the sources of competitive advantage firms are using many tools to analyze their external (Porter’s 5 Forces, PEST analysis) and internal (Value Chain analysis, BCG Matrix) environments. One of such tools that analyze firm’s internal resources is VRIO analysis. The tool was originally developed by Barney, J. B. (1991) in his work ‘Firm Resources and Sustained Competitive Advantage’, where the author identified four attributes that firm’s resources must possess in order to become a source of sustained competitive advantage. According to him, the resources must be Valuable, Rare, imperfectly Imitable and Non-substitutable. His original framework was called VRIN. In 1995, in his later work ‘Looking Inside for Competitive Advantage’ Barney has introduced VRIO framework, which was the improvement of VRIN model. VRIO analysis stands for four questions that ask if a resource is: Valuable? Rare? Costly to Imitate? And is a firm Organized to capture the value of the resources? A resource or capability that meets all four requirements can bring sustained competitive advantage for the company. Valuable The first question of the framework asks if a resource adds value by enabling a firm to exploit opportunities or defend against threats. If the answer is yes, then a resource is considered valuable. Resources...
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...------------------------------------------------- VRIO From Wikipedia, the free encyclopedia The VRIO framework, in a wider scope, is part of a much larger strategic scheme of a firm. The basic strategic process that any firm goes through begins with a vision statement, and continues on through objectives, internal & external analysis, strategic choices (both business-level and corporate-level), and strategic implementation. The firm will hope that this process results in a competitive advantage in the marketplace they operate in. VRIO falls into the internal analysis step of these procedures, but is used as a framework in evaluating just about all resources and capabilities of a firm, regardless of what phase of the strategic model it falls under. VRIO is an acronym for the four question framework you ask about a resource or capability to determine its competitive potential: the question of Value, the question of Rarity, the question of Imitability (Ease/Difficulty to Imitate), and the question of Organization (ability to exploit the resource or capability). * The Question of Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?" * The Question of Rarity: "Is control of the resource/capability in the hands of a relative few?" * The Question of Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability...
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...IT as a Competitive Advantage Marcus Liubakka The College of Saint Scholastica Introduction In 2003, Nicholas Carr, published a controversial article titled “IT Doesn’t Matter”. The premise of his article defines IT as a digital data infrastructure, and compares its build-out to previous impactful infrastructure build-outs like electricity and the railroad. Carr claims that IT has become a commodity, and businesses can no longer use their IT as a competitive advantage. This paper will further analyze Carr’s article, and make recommendations as to how businesses can leverage IT as a competitive advantage for the future. Analysis Rationale To fully understand how a business can leverage IT as a competitive advantage, one must fully understand the concept. In short, a business has a competitive advantage if it has the ability to provide an added value to its customers that its competitors cannot. A competitive advantage is also obtained by providing a value to a customer equal to its competitors, but with a lower cost. There are many factors which play into achieving a competitive advantage, however, organizations need to focus on sustainable competitive advantages. “In his book Competitive Advantage, Porter claims the ‘fundamental basis of above-average performance in the long run is sustainable competitive advantage’” (Pearlson & Saunders, 2013, p. 28). A sustainable competitive advantage is predicated on successfully creating barriers to erosion (Piccoli & Ives, 2005)...
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...unit, write a report on the ways three different organisations have been able to obtain sustained competitive advantage in their markets. Your report should discuss the following points about each of the three organisations: 1. Evidence that the organisation has a sustained competitive advantage 2. Theoretical analysis of the reasons for the achievement of sustained competitive advantage. Your discussion is to be based on three suitable published case studies. This means case studies published in the academic literature – for example, the series of case studies in the textbook or in equivalent textbooks. You may not use Yahoo! as one of the case studies and short articles in newspapers, magazines, website opinion pages and the like are definitely not acceptable, although such materials may be used to supplement the published case study and your analysis. All sources must be properly referenced. If in any doubt about the suitability of a case study, seek an early ruling from your tutor. This is a substantial piece of scholarly work and will require extensive engagement with both unit theory and at least three detailed case studies. Process: 1. Choose your three cases. They all need to be published cases in academic sources (e.g. textbooks, journal articles). It is obviously important that each case represents an instance of a company achieving sustained competitive advantage (check your materials to be clear about what...
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...to its owner a sustainable competitive advantage. Therefore, resources and competencies approach first appeared as a theory of competitive advantage or a theory of “performance of the firm” (Argyres & Zenger, 2007). It is only recently, in the last 20 years that organizations have started using the resource based view approach on strategy. Nowadays, they view it as the most important key development in international business research and strategic management, an approach that gives a coherent vision based on a firm's capabilities to help determine the strategic resources necessary for the firm's survival and growth within a particular market place. As Hitt et al (2001) stated, “the resource based model assumes that each organization is a collection of unique resources and capabilities that provides the basis for its strategy and that is the primary source of return.”. It suggests that in order for a firm to sustain competitive advantage, it must not only have resources and capabilities but also have a firm control over it and they must meet certain basic criteria such as being: valuable, rare, inimitable and non substitutable such that it is impossible to be copied or replicated (VRIN). Although a resource based view strategy sounds like the better way to go, others have wondered if this approach is at all necessary or bring any more insight than the traditional understandings into a successful strategy to survive and thrive into a competitive market,...
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...industry, the threat of a new entrance is relatively low. This consideration is achieved by the advantages that already had by the incumbents. For example, Walmart that was considered as a leader in sales for supermarket in USA,[1] Walmart even already grasped the US market share in 1990 with 41%[2], Walmart had a market presence, buying power and breadth of inventory. Moreover, Walmart also spent large amount of capital investment for its IT division and distribution logistics. Walmarts had IT capability to check individual product sales. In consequences, Walmart is the only retailer that can provide real-time sales data for many suppliers. The market power that Walmarts have, make them very easy to bargain with the supplier, this situation makes it harder for the new entrance to compete with Walmarts. On the other hand, ALDI is considered as a discount grocery chain also has its advantage. ALDI’s unique operating model makes it almost impossible for competitors to match price and quality. Max Levitte, CEO cheapism.com, wrote that one day he visited a store in Ohio and compared ALDI to Kroger and Walmarts, so with the same items in various departments, ALDI was the cheaper for total item in shopping cart, with the gap is more than $13 with Walmarts and more than $21 with Kroger.[3] The bankruptcy case of Kmart in 2002 also strengthen the argument that the low price advantage of ALDI is hard to be beaten. On the other hand, Walmart’s supply chain efficiencies and the...
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...some form of ‘sustained competitive advantage’ (Porter 1980,1985). Taking a balanced approach, discuss Porter’s statement and include in your discussion reference to the theoretical implications of the resource-based view of SHRM and its limitations In the past decades, companies have consistently planned their strategy analysis based on the opportunities and threats created by the external environment. In recent years however, technological advancement, political and other economical factors have created many competition and barriers in the marketplace. With the great uncertainties pose a tremendous challenge on businesses attempting to gain steady competitive advantage in the market, as long-term strategy making assumes a relatively stable world, overlooking needs for changes in the business practices. This consequently forced companies to shift their organisational strategic goal to incorporate the importance of human resource management by further analyse its internal resources and skills to achieve sustained competitive advantage in the market. Henceforth for the last decade, strategic human resource researchers have increasingly looked into associating resourced-based approach in attempts to maximize business performance and gaining competitive advantage through internal development (Darroch, 2005). Assuming a firm is recognised for having sustained competitive advantage in the market means that the company has a relatively enduring form of competitive superiority...
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...the organization achieve its competitive advantage. Changes in the environment such as widespread globalization, rapid technology and other such factors have led to organizations realizing the significance of controlling human resources in a firm. Since organizations have also become more dynamic and complex, the need to manage human resources has become more essential. In recent years, many individuals demanded for a more strategic approach to managing people in a firm, rather than the traditional methods, and thus the idea of strategic human resource management (SHRM) was adopted. Strategic human resource management is a branch of human resource management, and it can be defined as ‘ the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation, flexibility and competitive advantage.’ (Sinha, R 2007). This essay is going to focus on how strategic human resource management helps organizations achieve a sustained competitive advantage. Sustainable competitive advantage is the position a firm develops in relation to its competitors that are not duplicable an unsurpassable than its competitors. Recently scholars have come to the basis of HR skills and competences as sources of competitive advantage. Human resource practices as well as competitive strategies are based on the assumption that employee behaviors are needed for each type of competitive strategy and that these behaviors...
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...resources are the ingredient in creating a sustainable competitive advantage * Definition of a competitive advantage and the characteristics of a sustainable competitive advantage- Barney’s Criteria * Human resources as a firms source of competitive advantage * Need for high-cognitive workforce (build core competencies through distinct capabilities)- static and dynamic environments * Need to build strategic management processes * Human resource practices- the source of sustained competitive advantage lies in the human resources themselves, not the practices used to attract, utilise and retain them (practices are not rare, inimitable and non-substitutable) * The role of managers in developing human resources * Developing practise and programs such as training and appraisals to enhance the capabilities of the pool of human resources- therefore contributing to a sustainable competitive advantage * Cultural diversity in human capital serves as a source of sustained competitive advantage because it creates value that is both difficult to imitate and rare * Practical application of the theory * Implications for strategic human resource management * Benefits in business strategy * Criticisms of the resource based view * Narrow explanation of a firms competitive advantage * Possession of resources is not sufficient for attaining a sustainable competitive advantage. To create a SCA a firm needs both a bundle of...
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...The Resource Based View – Jay Barney A firm’s competitive advantage lies in its resources. It exams the link between a firms resource ans sustained competitive advantage. To sustain a competitive advantage it requires that these resources heterogeneous and immobile. The key point of the theory is to identify the firm’s resources and see if it is VRIN (Value, Rarity, In-imitable and Non substitutable) and then protect them. Formal planning is highly imitable and thus cannot be a source of sustained competitive advantage. An argument for heterogeneity is the first mover advantage where the firm may gain access to good distribution channels; develop good reputations before competitors come. Likewise theyre are barriers to entry. How to apply the resource based view: Definitons: It resources include all assets, capabilities, organizational processes, firm attributes, information, knowledge etc. controlled by a firm that will help its efficiency. This will be broken down into human, physical and organization resources. A sustained competitive advantage when it is implementing a value creating strategy not simulteously being implemented by any current or potential competitor and when these other firms are unable to duplicate the benefit of this strategy. Not on calendar time. Critique * Priem and Butlers critique to 1991 paper states it is tautological (it is true in all possible interpretations). That’s its primary assertions are true by definition, and, thus not subject...
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...Chapter 1 Introduction to Strategy * Strategy: Theory of how to gain competitive advantages. (How competition is going to evolve, and how that evolution can be exploited for competitive advantage.) Based on knowledge of the marketplace and based on the firm’s capabilities and resources. a) Being different from your rivals b) Creating value while containing costs c) Deciding what to do and what NOT to do d) Combining activities to land in a unique market position e) Making long-term commitments that may not be easily reversible f) A constant decision-making process * Theories answer, “If we do X, then we will get Y.” * Strategy management process: a sequential set of analyses and choices that can increase the likelihood that a firm will choose a good strategy. * Why do we exist? (MissionObjectives) Can we compete? (External/ Internal Analysis) How do we succeed? (Strategic ChoiceStrategy Implementation)Competitive Advantage Success = Sustained Competitive Advantage * Strategy and the Strategic Management Process * Mission: long-term purpose, define both what a firm aspires to be in the long run and what it wants to avoid in the meantime. * Mission Statements: written down form; strategic decisions fail when mission statement is not followed * Key question to address: What is our business? What is our reason for being? Whom do we want to serve? * Is it good? An excellent mission statement...
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