Competitive advantage

1. Done by :
Nour Ouda
Salam El-Helw
Hadeel Garghon
Supervised by:
Dr. Nizar naim

2. In 2007, Hyundai motor company
has put a new car on markets.
The new car is “GENESIS”
Genesis’ main consumer target is
high-income grade.
The reason of launching Genesis is that
Hyundai motor will be target a high-grade
car market over the world.
Until 1990s, Hyundai was treated
“ Cheep price, suitable quality “
In US car market.
But, Global car market is more and more intense.
So, Hyundai do not survive existing cost-leadership strategy.

3. In 2007, Hyundai motors has launching High-Class Premium Car
“GENESIS”
The Means of GENESIS is that Hyundai will be concentrate the
premium
car market and Differentiation is new strategy on Hyundai.

4. 1. What is the Competitive Advantage?
2. Source of Global Competitive Advantage
3. Competitive Advantage by Porter

5. Competitive advantage

6. The company will be able to apply to strong point
Without being what does not evaluate a property
and the ability which the company possesses
Competition company comparison will lead and t
he strong point which is relative could be grasped
.
The strategy which sees from viewpoint of competitive
advantage
Continuous a competitive advantage reinforcement a
nd competitive advantage endeavors not to disappear

7. The reason of enterprise
have a competitive advantage
1. Customer satisfaction and loyalty increase, Increase of profit
, Increase of market share
→ bring market perfomance
2. The product offering which is value in the market
→ competitive advantage offering valuable product and service
3. various size and scope and profitability of company
→ The competitive advantage makes the base will be able to
expand
the enterprise which is various.

8. Competitive Advantage Cycle.
Step 1. Source of Competitive Advantage
Superior assets
Super Capabilities
Key Success Factor
Step 2. Barriers to Imitation
higher the barrier to entry to company
When the new business opportunity
coming from the Market which enters
first mover advantage
barriers to imitation

9. Step 3. Value proposal form of competitive advantage
Operational Excellence
Product Leadership
Customer relationship
Step 4.Eencroachment aprevents of competitive advantage
New competitive advantage position construction
effort encroachment prevents of competitive advantage
Reinvestment of profit
asset and capability accumulation
resource strengthen of competitive advantage

10. A Model of Competitive advantage
Resources
Distinctive Cost advantage
Or Value
Competencies
Creation
Differentiation advantage
Capabilities

11. Cost advantage
Competitive
Advantage Niche advantage source
sources
Differentiation
Advantage

12. Main aspects of five forces analysis
1. the rivalry between existing sellers in the market
2. the potential threat of the entry of new competitors
3. the threat of substitute products becoming available
the market
4. the bargaining power of consumer
5. the bargaining power of suppliers

13. Competitive advantage strategies

14. 1. Cost Leadership (Low Cost Strategy)
produce goods level of equal more inexpensive,,(producing highly
standerized product with lowest cost because of economies of
scale .. Appropraite where business have high market share…
2. differentiation (Differentiation Strategy)
differentiating a product or service from the competitor's products o
r services. The differentiation may be in the product form, the bra
nd image, features, technology, customer service, pricing or distri
bution channels.
3&4. Focus Cost Leadership / Differentiation:
When competition's range is narrow, in other words when target
on specific customer segment ,,will be focused cost leadership and
differentiation strategy.

15. Source of Global competitive advantage
Tapping the
optimal Maximizing
Adapting to Exploiting Exploiting
locations knowledge
local economies economies
for transfer
market of global of global
activities across
differences scale scope
and location
resources

16. 1- Adapting to Local Market Differences
Companies must respond to the inevitable heterogeneity they will
encounter in these markets.
The company should consider that there is adifferences in language,
culture, income levels, customer preferences, and distribution
systems.
(a) (b) (c) Adapting
Increased Improved Neutralizing to local
market price local market
share. realization. competitors. differences

17. Cont,,
(a) Increased market share:
Offering standard products and services across countries
Cont,,
reduces the boundaries of the served market to only those
customers whose needs are uniform across countries.
(b) Improved price realization:
- Tailoring products and services to the preferences of local
customers enhances the value delivered to them.
- A portion of this increased value should translate into higher
price realization for the firm

18. 2- Exploiting Economies of Global Scale
*Building a global presence automatically expands a
company's scale of operations, giving it larger revenues
and a larger asset base.
*Potential benefits of economies of scale in various ways:
spreading fixed costs, reducing capital and operating
costs, pooling purchasing power, and creating critical
mass.

19. 3- Exploiting Economies of Global Scope
Global scope refers to the multiplicity of regions and
countries in which a company markets its products and
services.
(a) Providing coordinated services to global
customers.
(b) Market power compared with competitors
• A global supplier has the opportunity to understand
the unique strategic requirements and culture of its
global customer.

20. 4- Tapping the Optimal for Activities and resources
Locations
A firm that can exploit these intercountry differences
better than its competitors has the potential to create
significant proprietary advantage
(a) Performance enhancement.
(b) Cost reduction.
(c) Risk reduction.

21. 5- Maximizing Knowledge Transfer Across Locations
(a) Faster product and process innovation.
(b) Lower cost innovation.
(c) Reduced risk of competitive preemption.

22. How a firm can actually
create and sustain a
competitive advantage
in its industry?

23. Competitive strategy :is about being different. It means
deliberately choosing to perform activities differently or to
perform different activities than rivals to deliver a unique
mix of value.”
-- Michael Porter (the father of
competitive strategy)

24. Two Basic Types
Differentiation
Cost Leadership
Both can be more broadly approached or narrow,
which results in the third viable competitive strategy

25. Approach 1 to Competitive advantage: Cost leadership
- A firm sets out to become the low cost producer in its industry.
- Note: a cost leader must achieve parity or at least proximity in
the bases of differentiation, even though it relies on cost
leadership for it’s CA.
-Note: if more than one company aim for cost leadership,
usually this is disastrous.
- Often achieved by economies of scale
-Examples of Cost Leadership: Nisson; Tesco; Dell

26. Competitive advantage model 2: Differentiation
- a firm seeks to be unique in it’s industry along some
dimensions that are widely valued by buyers.
- Note: a differentiator cannot ignore it’s cost position. In all
areas that do not affect it’s differentiation it should try to
decrease cost…
- differentiation can be applied: product, distribution, sales,
marketing, service, image, etc.

27. Competitive advantage 3: Focus
*a firm sets out to be best in a segment or group of
segments.
*variants: cost focus and differentiation focus.