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1 Strategic Elements of Competitive Advantage 2 Learning Objectives 16.1 Identify the forces that shape competition in an industry and illustrate each force with a specific company or industry example. 16.2 Define competitive advantage and identify the key conceptual frameworks that guide decision makers in the strategic planning process. 16.3 Explain how a nation can achieve competitive advantage, and list the forces that may be present in a national “diamond”. 16.4 Define hypercompetitive industry and list the key arenas in which dynamic strategic interactions take place. 3 Industry Analysis: Forces Influencing Competition 4 Porter’s Force 1: Threat of New Entrants 5 Threat of New Entrants: Barriers to Entry (1 of 3) 6 Threat of New Entrants: Barriers to Entry (2 of 3) 7 Threat of New Entrants: Barriers to Entry (3 of 3) 8 Porter’s Force 2: Threat of Substitute Products 9 Porter’s Force 3: Bargaining Power of Buyers 10 Bargaining Power of Buyers (1 of 2) 11 Bargaining Power of Buyers (2 of 2) 12 Porter’s Force 4: Bargaining Power of Suppliers 13 Porter’s Force 5: Rivalry Among Competitors 14 Competitive Advantage (1 of 2) 15 Competitive Advantage (2 of 2) 16 Generic Strategies for Creating Competitive Advantage 17 Broad Market Strategy: Cost Leadership 18 Broad Market Strategy: Product Differentiation 19 Narrow Market Strategy: Cost Focus 20 Narrow Market Strategy: Focused Differentiation (1 of 2) 21 Narrow Market Strategy: Focused Differentiation (2 of 2) 22 Creating Competitive Advantage via Strategic Intent (1 of 2) 23 Creating Competitive Advantage via Strategic Intent (2 of 2) 24 Building Layers of Advantage 25 Searching for Loose Bricks 26 Changing the Rules of Engagement 27 Collaborating Use the know-how developed by other companies 28 Global Competition and National Competitive Advantage 29 Factor Conditions (1 of 2) 30 Factor Conditions (2 of 2) 31 Demand Conditions (1 of 2) 32 Demand Conditions (2 of 2) 33 Related and Supporting Industries 34 Firm Strategy, Structure, and Rivalry (1 of 2) 35 Firm Strategy, Structure, and Rivalry (2 of 2) 36 Current Issues in Competitive Advantage (1 of 3) 37 Current Issues in Competitive Advantage (2 of 3) 38 Cost/Quality Cost/Quality occurs via 7 dynamic strategic interactions: 39 Timing and Know-How Second arena for hypercompetition 40 Entry Barriers The third arena for hypercompetition is high barriers to entry Build a geographic stronghold Target the stronghold of competitors in other countries Incumbents make short-term counter-responses to guerilla attacks The Incumbent responds to the invader by creating new hurdles Industries in which barriers to entry have been built up comprise the third arena in which hypercompetitive behavior is exhibited. As described earlier in the chapter, these barriers include economies of scale, product differentiation, capital investments, switching costs, access to distribution channels, cost advantages other than scale, and government policies. D’Aveni describes how aggressive competitors erode these traditional entry barriers via eight strategic interactions. For example, a cornerstone of Dell’s global success in the PC industry is a direct-sales approach that bypasses dealers and other distribution channels. 41 Current Issues in Competitive Advantage (3 of 3) 42 The Flagship Firm A collection of 5 partners 43 Blue Ocean Strategy Two categories of competitive spaces: 44 Copyright |