Thursday, May 10, 2012

Building sustainable competitive Advantages.

Building sustainable competitive Advantages.
Competitive advantages means pulps point or strength of a company. Every company wants to build its strength for long term period.
Competitive advantages could be gain through low cost, product differentiation, speed (work) and market focus.

Evaluating and choosing business strategies:
It means seeking sustained competitive advantages.
Sustained competitive advantages could be seek from 2 main sources.
  • Business Cost
  • Ability to differentiation
a) Evaluating cost leadership opportunities.
It means ability of a business to produce its product or services at a cost below.

  • Less price competition.
  • Discourage new entrance.
  • Less the attractiveness of substitute products.
b) Evaluating Differentiation opportunities.
It means ability of a business to produce differentiate products.

  • It reduce competition.
  • Buyers are less sensitive to price for differentiated products.
  • Brand loyalty for new differentiated products
c) Evaluation Market focus as a way to competitive Advantage.

1) Push customer to buy goods
2) To provide new feature products.
3) New ways adopted to attract customer.

d) Evaluating speed as a competitive advantage.
Speed is another source to gain competitive advantage.

  • customer responsiveness (quick response by circulating period firstly)
  • product development cycle (new product, ideas screening etc)
  • speed in delivery or distribution.

Selected industry Environment and business Strategy choices.

Selected industry Environment and business Strategy choices.
First of all we have to select an industry then we study the environment of that industry by findings.

1) Opportunities.
2) Threats

Which business strategy will be used depends on environment in which we are going to operate. We have to match our strength and weaknesses with opportunities and threats in environment. (Swat analysis complete at this stage)
Competitive Advantages in Emerging industries.
Competitive Advantages in Emerging industries are newly formed or refund industries.
For example fiber internet browser, solar heating and telecommunication industries.

Competitive Advantages in Emerging industries:
  • ability to shape the industry structure
  • ability to rapidly improve product quality.
  • Relationship with key suppliers.
  • Ability to forecast/ predict future competition.
Competitive advantages in Transition to industry Maturity:
  • Focus on product line
  • Emphasize on prcess innovation
  • Emphasize on cost reduction
  • International expansion.
Competitive advantage in maturity and Decline period/ Decline Industry:

Advantages for maturity to Decline.
1). Focuses on segments.
2). Emphasize product innovation and quality improvement.
3). Gradually harvest the business.

Competetive advantages in segmented industry:
A fragmented industry is one in which no firm has a significant market share and can not strongly influence industry outcomes.

Competitive advantages:
  • Low cost.
  • Differentiation.
  • Focus on market

Competitive Advantage in Global industry:
Licensing---> Contracts ---->Agrements.
Experiance ---> Staff management.

Strategy Implementation

A) Strategy Implementation

Implementation strategy through short term objective, functional tactics, reward system and empower people in the organization.

When manager successfully make their objectives and strategy and implement, they do four main things:
  1. Identify short term objectives.
  2. Initiate specific functional tactics.
  3. Communicates policies (guidelines) that empower people in the organization.
  4. Design effective rewards.

Short term objectives

B) Short term objectives.

Short term objectives means objectives set for a period of less than a one year.

Short term objectives provide a specific guidelines for what is to be done. What actions required.

Qualities of effective short term Objectives:
  • Measurable (Countable)
  • Periorties (grading, ranking)
  • Link to long term Objectives.
The value added benefits of short term objectives and action plans:
The benefits of short term objectives and action plans are
  • Clearity of purpose or role.
  • Bases for strategic control.
  • Motivational payoff.

Function tactics that implement business strategies.

Function tactics that implement business strategies.
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5
C) Function tactics that implement business strategies.

Tactics are that translate through (grand strategies) into action to achieve short term objectives (small goals + long/ grand strategies).

Functional areas (used in tactics):
  • Marketing
  • Finance
  • Research and Development
  • Production or Operations
  • Human resource management.
Functional Tactics:
Tactics used in functional areas that called functional tactics.

Difference between business strategies and functional tactics
DifferenceFunctional TacticsBusiness Strategies
Time HorizonShort termLong term
SpecificMore specifiedLess specified
Participant who develop themLine managers or operating managers e.g. HRM managersTop managers e.g board of directors.


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