Competitive Advantage Resources and Capabilities

Nethra.U

Overview
What is competitive Advantage? A model of Competitive advantage. Generic Building blocks of Competitive advantage. Competitive advantage Resources Capabilities

The Hierarchy of Development of Competitive Advantages Case study

What is Competitive Advantage?

The term competitive advantage is the ability gained through attributes and resources to perform at a higher level than others in the same industry or market . When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals.

Marketing and Distribution New product Innovation

Technology software

cheaper and even better versions of mobile phones

Cost leadership , SCM

DISTINCTIVE COMPETENCIES

COMPETITVE ADVANTAGE

VALUE CREATION

Competitive Advantage
Types by Michael Porter
Cost Advantage Differentiation Advantage
Positional Advantages i.e. As leader in cost or differentiation

Resource based View

resources and capabilities

competitive advantage -> Superior value

Resources
A resource is an asset, competency, process, skill or knowledge. Strength potential to do particularly well than its rivals Weakness-something does corporation poorly Classified as
Tangible Intangible

Resources
Technological resources, including Financial resources- Physical plant, patents, trademarks, knowledge, raw materials and equipment. etc. Human abilities, including Innovation abilities, including experience, knowledge, skill, facilities and employee research attitude, etc. skills Organizational abilities including Reputation, including perceptions structure and processes by stakeholders and brand name
Tangible Resources Intangible Resources

Valuable

DEVELOPING RESOURCES INTO Is the resource or capability valuable in delivering the firms service or product to its COMPETITIVE ADVANTAGES customer? This is a necessary resource quality.
Durable Is the resource or capability temporal (i.e., will disappear over a period of time) in nature (e.g., a limited natural resource)?

Durable

Rare
Is the resource rare, or do many other firms have this competitive capability?

Inimitable or non-substitutable
Is the resource or capability unique to your firm relative to the competition? Can a resource or capability be substituted by another one in your business or industry?

Complex
Does a resource or capability have a breadth, scope, and complexity to make it difficult for others to both imitate and understand (e.g., organizational culture)?

Capabilities
Sets of competitive advantages that management integrates and coordinates to produce a multifaceted value-producing advantage over competitors.
Examples 1.learning proficiencies. 2. product development processes.

3. fast delivery times.

4.managerial abilities.

Organizational Capabilities = firms capacity for undertaking a particular activity. (Grant) Distinctive Competence = things that an organization does particularly well relative to competitors. (Selznick) Core Competence = capabilities that are fundamental to a firms strategy and performance. (Hamel and Prahalad)

The Hierarchy of Development of Competitive Advantages

Resources Competitive Advantages Competitive Capabilities Sustainable Competitive Advantages and Capabilities Core Competencies

Google's Big Three Competitive Advantages

Technology Infrastructure Innovative Services Market Share

Technology Infrastructure

Googles data centers are incredibly efficient as they use less than 1% of the power used by Powerful infrastructure cannot be easily data centers worldwide replicated. Data Center Knowledge reported that Google was probably using somewhere around 900,000 servers.

Innovative Services
100 s of Google services in house and acquisition

Attractive advertising model

services at zero cost to web users

Market Share
Google has held this strong majority of search market share for quite some time.

THANK YOU !