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Competitive Advantage:
Is DQE the base of competitive advantage?
Prof. Spyros Lioukas, Dr Irini Voudouris Athens University of Economics and Business
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
Objectives:
DQE
Learners will
Understand the meaning of competitive advantage Understand what are the main types of competitive advantage Identify how competitive advantage may be created Recognize the basis of sustainable competitive advantage Distinguish the new bases of competitive advantage Identify how the DQE approach enhances the creation of sustainable competitive advantage
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
DQE
a basis for the firms long term success? a basis for value creation?
DQE
When two or more firms compete within the same market, one firms possesses a competitive advantage over its rivals when it earns a persistently higher rate of profit (or has the potential to earn a persistently higher rate of profit)
R. M. Grant, 2000
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
DQE
Cost advantage
Competitive advantage
Differentiation advantage
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
DQE
Industry-wide
Cost leadership
Differentiation
Market
Niche
Focus with low cost
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
DQE
Differentiation
Differentiation
Cost Leadership
Efficient scale Standardization Design for low production cost Control of overheads and R&D Avoid marginal customers
Differentiation
Quality Innovation Design Credibility Brand name Reputation Environmental posture Customer service Integrated services
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Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
DQE
DQE
Increased competition leads to decrease of differences in competitive advantage Standardization/ mass production of unique features: What can be left for differentiation?
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DQE
The firm must seek competitive advantage in combining resources & capabilities
Develop resources and capabilities, which are rare, valuable, non-tradable,
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DQE
DQE
J. Kay
Strategic assets
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
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Prerequisites
Delivery time
Creditability
Delivery time
Creditability
Product Service
Design Marketing Customer service
Product Service
Design Marketing Customer service
Customized product
Reputation Innovative product
Customized product
Reputation Innovative product
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
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DQE
Quality and quality of customer service Design Innovative product Customized product with integrated services Environmental friendly
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
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DQE
References
R.M. Grant, Contemporary Strategy Analysis, Blackwell Publishers, 2000. M.E. Porter, Competitive Advantage, New York: Free Press, 1985. J. Kay, Foundations of Corporate Success, Oxford University Press, 1995. G. Johnson, K. Scholes & R. Whittington, Exploring Corporate Strategy, Prentice Hall, 7th eds, 2005 C. Prahalad & G. Hamel, The core competences of the corporation, Harvard Business Review, vol. 28, n.3, may-june, 1990.
Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds
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DQE
References
S. Marthur, How firms compete? The Journal of General Management, vol.14, no 1, autumn 1988. F. Tilley, P. Hooper & L. Walley, Sustainability and competitiveness: Are there mutual advantages for SMEs?, in J. Oswald & F. Tilley, Competitive Advantage in SMEs: Organising for innovation and change, Wiley, 2003. K. Weigelt &C. Camerer, (1988), Reputation and Corporate Strategy: A review of recent theory and applications, Strategic Management Journal, 9
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