PDF | Strategic planning as a formal discipline originated in the s and early s. It soon became a fad, but faded equally quickly when the promised. Competitive Advantage Revisited: Michael Porter on Strategy and Competitiveness. Article (PDF Available) in Journal of Management Inquiry 16(3): Library of Congress Cataloging-in-Publication Data. Porter, Michael E. Competitive strategy: techniques for analyzing industries and competitors: with a new.
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COMPETITIVE. ADVANTAGE. Creating and Sustaining. Superior Peifonnance. Michael E. Porter. 1&1. THE FREE PRESS. A Division of A1acmillan, Inc. Strategy and Competitiveness, lesforgesdessalles.info Competitive Advantage: Enduring Ideas and New Opportunities. Professor Michael E. Porter. Michael Porter - Competitive lesforgesdessalles.info - Ebook download as PDF File .pdf), Text File .txt) or read book online.
Long Range Planning. Major thinkers. Business and economics portal. Choosing Your Route to Success". Learn more. Management Decision. In this method, some firms may even let consumers give their inputs for their product or service.
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Returning user. Request Username Can't sign in? Competitive advantage seeks to address some of the criticisms of comparative advantage. Competitive advantage rests on the notion that cheap labor is ubiquitous and natural resources are not necessary for a good economy. The other theory, comparative advantage, can lead countries to specialize in exporting primary goods and raw materials that trap countries in low-wage economies due to terms of trade.
Competitive advantage attempts to correct this issue by stressing on maximizing scale economies in goods and services that garner premium prices Stutz and Warf The term competitive advantage refers to the ability gained through attributes and resources to perform at a higher level than others in the same industry or market Christensen and Fahey , Kay , Porter cited by Chacarbaghi and Lynch , p.
Successfully implemented strategies will lift a firm to superior performance by facilitating the firm with competitive advantage to outperform current or potential players Passemard and Calantone , p. The quotes above signify competitive advantage as the ability to stay ahead of present or potential competition. Also, it provides the understanding that resources held by a firm and the business strategy will have a profound impact on generating competitive advantage.
Powell , p. Hence, viable business strategy may not be adequate unless it possesses control over unique resources that have the ability to create such a relatively unique advantage.
Michael Porter, a graduate of Harvard University, wrote a book in which identified three strategies that businesses can use to tackle competition. This book was named the ninth most influential management book of the 20th century. These approaches can be applied to all businesses whether they are product-based or service-based.
He called these approaches generic strategies. They include cost leadership, differentiation, and focus. These strategies have been created to improve and gain a competitive advantage over competitors. These strategies can also be recognized as the comparative advantage and the differential advantage. Cost leadership is a business' ability to produce a product or service that will be at a lower cost than other competitors. If the business is able to produce the same quality product but sell it for less, this gives them a competitive advantage over other businesses.
Therefore, this provides a price value to the customers. Lower costs will result in higher profits as businesses are still making a reasonable profit on each good or service sold.
If businesses are not making a large enough profit, Porter recommends finding a lower-cost base such as labor, materials, and facilities. This gives businesses a lower manufacturing cost over those of other competitors. A differential advantage is when a business' products or services are different to its competitors.
In his book, Michael Porter recommended making those goods or services attractive to stand out from their competitors. The business will need strong research, development and design thinking to create innovative ideas. These improvements to the goods or service could include delivering high quality to customers. If customers see a product or service as being different from other products, consumers are willing to pay more to receive these benefits. Focus strategy ideally tries to get businesses to aim at a few target markets rather than trying to target everyone.
This strategy is often used for smaller businesses since they may not have the appropriate resources or ability to target everyone. Businesses that use this method usually focus on the needs of the customer and how their products or services could improve their daily lives. In this method, some firms may even let consumers give their inputs for their product or service.
This strategy can also be called the segmentation strategy, which includes geographic, demographic, behavioral and physical segmentation. By narrowing the market down to smaller segments, businesses are able to meet the needs of the consumer. Porter believes that once businesses have decided what groups they will target, it is essential to decide if they will take the cost leadership approach or differentiation approach.
Focus strategy will not make a business successful. Porter mentions that it is important to not use all 3 generic strategies because there is a high chance that companies will come out achieving no strategies instead of achieving success. This can be called "stuck in the middle", and the business won't be able to have a competitive advantage.
When businesses can find the perfect balance between price and quality, it usually leads to a successful product or service. A product or service must offer value through price or quality to ensure the business is successful in the market.
Success comes to firms that can deliver a product or service in a manner that is different, meaningful, and based on their customers' needs and desires. Deciding on the appropriate price and quality depends on the business's brand image and what they hope to achieve in relation to their competition. Positioning is an important marketing concept.
The main purpose of positioning is often to create the right perceptions in comparison to competitors. Thus, it creates competitive advantage. This positioning, or competitive advantage, is based on creating the right "image" or "identity" in the minds of the target group.
Therefore, both corporate identity and core competencies are underlying internal factors of competitive advantage.
The operational model for managing corporate reputation and image of Gray and Balmer proposes that corporate identity , communication , image, and reputation the fundamental components of the process of creating competitive advantage. Corporate identity through corporate communication creates corporate image and reputation, with an end result of competitive advantage.
Corporate identity is the reality of an organization. It refers to the distinct characteristics or core competencies of the organization. It is the mental picture of the company held by its audiences.
Corporate communication refers to all the official and informal communication sources, through a variety of media, by which the company outsources its identity to its audiences or stakeholders.
Corporate communication is the bridge between corporate identity and corporate image or reputation. A core competency is a concept introduced by Prahalad and Hamel Core competencies are part of the corporate identity; they form the foundation of corporate competitiveness. The competitiveness of a company is based on the ability to develop core competencies.
To sustain leadership in a chosen core competency area, companies should seek to maximize their competency factors in the core products like being important in positioning its values, distinctive differentiated , superior, communicable visibility , unique, affordable, and profitable.