Professional Documents
Culture Documents
for Business
Competitiveness
Business Strategies
Important Definitions
Strategic Competitiveness
Strategy
Competitive Advantage
Risk
Average Returns
Above-average Returns
1.
Economies of scale
Diversification
Product differentiation
Degree of concentration
of firms in the industry
2. Locate an attractive
industry with a high
potential for aboveaverage returns.
Attractive industry:
One whose structural
characteristics suggest
above-average returns.
Superior Returns
Industry Profitability
Suppliers
Buyers
Product substitutes
leadership
Producing
Differentiation
Manufacturing
Model Assumptions
Strategy:
Competitive Advantage
Resources
Capabilities
Core Competencies
Environment
1. Strategy is dictated by
the firms unique
resources and
capabilities.
2. Find an environment in
which to exploit these
assets (where are the
best opportunities?)
Resources
Capital equipment
Patents
Finances
Talented managers
Capabilities
Capacity of a set of
resources to perform in an
integrative manner
Resource-Based Model
(contd)
Resources
Resources: inputs into a firms
production process
Resource-Based Model
(contd)
Resources
Capability
Capability: capacity of an
integrated set of resources to
integratively perform a task or
activity.
Resource-Based Model
(contd)
Resources
Capability
Competitive Advantage
Competitive advantage:
ability of a firm to
outperform its rivals.
Resource-Based Model
(contd)
Resources
Capability
Competitive Advantage
Attractive Industry
Attractive industry: an industry
with opportunities that can be
exploited by the firms resources
and capabilities.
Resource-Based Model
(contd)
Resources
Capability
Competitive Advantage
Attractive Industry
Strategy Formulation
and Implementation
Resource-Based Model
(contd)
Resources
Capability
Competitive Advantage
Attractive Industry
Strategy Formulation
and Implementation
Superior Returns
Superior returns:
earning above-average
returns
Valuable
Rare
Core
Competencies
Nonsubstitutable
Costly to Imitate
Core Competencies
Resource-Based Model
Vision
A enduring picture of what the firm wants to be and, in broad terms, what
it wants to ultimately achieve.
Mission
Strategic Leaders
Strategic Leaders
Hard work
Thorough analyses
Honesty
Common sense