Strategic Elements of Competitive Advantage Chapter 10 Matakuliah: J0474 International Marketing Tahun : 2009

Bina Nusantara University 3 Learning Outcome Industry Analysis : Forces Influencing Competition. Competitive Advantage. Global Competition and National Competitive Advantage. Current Issues in Competitive Advantage.

Bina Nusantara University 4 Industry Analysis : Forces Influencing Competition Rivalry Among Competitors Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Treat of Substitute Products

Bina Nusantara University 5 Competitive Advantage Generic Strategies for Creating Competitive Advantage Cost Leadership Is competitive advantage based on a firm’s position as the industry’s low- cost producer in broadly defined markets or across a wide mix of products Cost Focus Or Focus Differentiation ? Differentiation Is competitive advantage when a firm’s product has an actual or perceived uniqueness in broad market. Competitive advantage exists when there is a match between a firm’s distinctive competencies and the factors critical for success within its industry.

Bina Nusantara University 6 Competitive Advantage The Flagship Firm : The Business Network with Five Partners Selected Competitors Flagship Firm Key Suppliers Key Customers Key Customers Other Suppliers Network partners Non-business infrastructure governments Network relationship Key: Commercial Relationship

Bina Nusantara University 7 Competitive Advantage Collaborating Building layers of advantage Searching for loose bricks Changing the rules of engagement Creating Competitive Advantage via Strategic Intent Hamel and Prahalad define competitive innovation as the art of containing competitive risks within manageable proportions and identify four successful approaches used by Japanese competitors.

Bina Nusantara University 8 Global Competition and National Competitive Advantage National Diamond Firm Strategy, Structure, And Rivalry Demand Conditions Factor Conditions Related and Supporting Industries

Bina Nusantara University 9 Current Issues in Competitive advantage. Dynamic Strategic Interactions in Hypercompetitive Industries 1. Cost/Quality 2. Timing and Know-how 3. Entry barriers Arena Dynamic Strategic Interaction 1.Price wars 2.Quality and price positioning, 3.etc 1.Capturing first-moving advantage 2. Imitation and improvement, etc 1.Building a geographic stronghold by 2.Creating and reinforcing entry barriers

Bina Nusantara University 10 Summary Management can use Porter’s generic strategies model to conceptualize possible source of competitive advantage. Rugman and D’Cruz have developed a framework known as the flagship model to explain how networked business systems have achieved success in global industries. Porter’s work has been the catalyst for promising new research into strategy issues. Including D’Aveni’s work on hyper competition and Rugman’s recent double-diamond frame work for national competitive advantage