February 23, 2019

Creating Competitive Advantage P. Ghemawat & J. Rivkin Cont’d. How does a firm identify opportunities to create competitive advantage Dumb (or smart) luck. Strategists Pankaj Ghemawat and Jan Rivkin appear in the HBR February edition. In it, they examine why large differences in economic performance exist, . Creating Competitive Advantage P. Ghemawat J. W. Rivkin December 22nd, Submitted By: Group A5 – Section A Ajay Bansal Alpesh Chaddha Aman.

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Creating Competitive Advantage_百度文库

Use Activities to Analyze Relative Costs Competitive cost analysis is the usual starting point for the strategic analysis of competitive advantage. We can, however, suggest a few patterns from past experience: By reverse-engineering the analyses they do from the options they have, managers can focus on the analyses that truly matter. Figure 9 shows such an analysis for the snack cake market.

Compustat, Value Line, Marakon Associates analysis In light of this, strategists need a systematic way to understand and analyze within-industry differences in performance. Or a Liz Claiborne perceives huge pent-up demand for a collection of medium- to high20 end work clothes for female professionals. Betsy Baking, for instance, saw that preservatives were a substitute for fast delivery.

Fleet management would involve a shift from selling power tools to leasing them as a service. Once activities have been cataloged, they must be analyzed in terms of cost and willingness to pay relative to the competition. As Figure 7 shows, although Collins sold the typical package of snack cakes to retailers for 72?

Readings and Ghmawat In the mind of Business. If the group of competing products plays a small role in satisfying a need relative to other products outside the group, the need can often be removed from the list. In our experience, firms that identify segments pinpoint between two fhemawat twelve clusters of customers.


Managers should understand if the savings are larger than the reduction in sales. Each activity generates costs. Conclusion This note has covered a lot of ground, but the main ideas are fairly simple: Activity Analysis How can one identify opportunities to raise willingness to pay by more than costs or to drive down costs without sacrificing too much willingness to pay? Its material handling equipment division served a range of customers, including forest ghemqwat companies such as International Paper.

Graphically, the interactions make the surface of the landscape rugged with lots of local peaks. To a certain extent, Schering-Plough has generated more economic profit than U.

See the bottom half of Figure 4. This helps us understand the large shifts in market share. In the snack cake example, the Collins managers felt that Betsy Baking would readily launch a price war against any competitor that tried to match its low-cost, low-price strategy. We remain leary, however, especially when the market research asks people to assess their willingness to pay for new products that they have never seen or for the satisfaction of needs that they themselves may not realize they have.

CREATING COMPETITIVE ADVANTAGE (P. Ghemawat, J. Rivkin, HBR, ) « Readings and Learnings

Rather, price is included as an attribute in surveys rivkjn customer needs so that one can calibrate the willingness of customers to pay a price premium for the other attributes ghemawst the survey such as freshness. Rarely do they consider the full range of ways in which all of their activities can create a wedge between willingness to pay and costs. Some customers in a bookstore want novels while others look for business books. Cite View Details Purchase.


The essence of creating advantage is finding an integrated set of choices that distinguishes a firm from its rivals. And when a business sells to end-users through intermediaries rather than directly, willingness to pay depends on multiple parties. Download ppt “Creating Competitive Advantage P.

Creating Competitive Advantage P. Ghemawat & J. Rivkin

Shanley, Economics of Strategy, New York: Such large differences in economic performance are commonplace. And even when broader is better, rvkin tend to be a variety of ways in which a firm can expand its reach, some of which such as licensing, franchises, or strategic alliances fall short of an outright expansion of scope. Free Press, especially Chapters First, to create an advantage, a firm must configure itself to do something unique and valuable.

Operation of automated baking, filling, and packaging production lines, largely depreciation, maintenance, and labor costs, amounted to 15?. Free Press,Chaptersand M.

Others relate to differences in firm location, functional policies, timing e. While fleet management had the potential to significantly improve the customer experience, Hilti was already a successful firm under its extant model and had to decide whether the restructuring of its business model was worth the risk.

In the final step of exploring options, however, the management team must work vigilantly to build a vision of the whole. Finally, market leaders often face a tension between managing industry structure and pursuing an advantage within that structure.