Brought to you by:. Industry and Background Note Classic. What's included: Educator Copy. Not teaching at a university? Register as a student Register as an individual. Overview Included Materials Related. Learning Objectives To introduce the concept of competitive advantage, how firms create and sustain it. What's included: Educator Copy. Not teaching at a university? Register as a student Register as an individual. Overview Included Materials.
Learning Objectives To introduce the concept of competitive advantage, how firms create and sustain it. Details Pub Date: Aug 9, Discipline: Strategy. Finance Globalization Health Care. Finance General Management Marketing. Technology and Operations Management. About the Author Jan W. The associated case explores the strategic decision-making process of premium power tools manufacturer Hilti inwhen the company was considering implementing a fleet management system in the construction industry.
Fleet management would involve a shift from selling power tools to leasing them as a service. For Hilti, it represented an entirely new business model, which would substantially differentiate the company from its competitors. 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.
Ghemawat J. Some customers in a bookstore want novels while others look for business books. Steel performed far worse than many other steel producers. To see why this is so, assume for a moment that a lucky firm does strike a deal that allows it to capture more than its added value. Similarly, a common error is to say that a company has differentiated itself by charging a lower price than its rivals.
More subtly, a firm can boost willingness to pay through activities associated with sales or delivery—the ease of purchase, speed of delivery, availability and terms of credit, convenience of the seller, quality of presale advice, etc. Urban deliveries tended to be more expensive than suburban because city traffic slowed down drivers. A number of pitfalls commonly competitibe newcomers to cost analysis.
This note takes an analytical approach to competitive advantage. Advanhage Outbound logistics Operations: Porter, Competitive Advantage, New York: The two firms occupy quite different peaks on the landscape of the financial services industry.
The added value of a firm is the maximal value created by all participants in a transaction minus the maximal value that could be created without the firm. Registration Forgot your password? We advantafe found a landscape metaphor helpful to describe the dilemma facing managers who are 38 searching for a favorable set of choices.
Graphically, the interactions make the surface of the landscape rugged with lots of local peaks. Email required Address never made public. A firm with a competitive advantage is positioned to earn superior profits within its industry.
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