Ch. 13 Strategic Positioning for Competitive Advantage

STRATEGIC POSITIONING FOR COMPETITIVE ADVANTAGE Presented by RAYA ANWARI

Line of Course  This Chapter develop a conceptual framework for characterizing and analyzing a rm’s strategic position within an industry.

!. "enes the concept of competitive advantage and argues that to achieve it# a rm must create more values than its rival.

 This ramework employs simple economic concepts to identify condition necessary for competitive advantage in a market.

$. "iscuss the economic and organizational logic of two broad alternatives approaches to positioning % cost leadership and benet leadership.

 The chapter is organized in three sections.

&. '(plores broad coverage versus focus strategies.

COMPETITIVE ADVANTAGE

Competitive )dvantage

% ramework

"enition

% *hen a rm earns higher rate of economic prot than the average rate of economic prot of other rms competing within the same market# the rm has a competitive advantage in that market.

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rms Protability depends +ointly on the economies of its market and its success creating more value than its competitors.

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matters more for Protability % the market or the irm,

-n fact# both market and positioning eects can e(plain protability /esearch by )nita 0raham and 1ichael Porter suggest that the industry responsible for about !23 of the variation prot across rms# while competitive position accounts for &$3 of the variation in prot.

ramework for Competitive Advantage

1arket 'conomics

4enet position relative to competitors

'conomic Protability 5alue created relative to competitors

Cost Position relative to competitors

Competitive advantage and 5alue Creation % Conceptual oundations The purposes of doing business is to create customer ~ Peter Drucker  4usiness that are successful in creating more value than competitors will attain an advantaged position relative to competitors in the marketplace. To illustrate why we need to dene value creation and show how it relates to competitive advantage.

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