Michael+Porter's+competitive+Advantage

Competitive Advantage Michael Porter  How a firm can actually create and sustain a competitive advantage in its industry. Two Basic Types :-  Cost Leadership. Differentiation. Cost Leadership Strategy : steps to achieve cost leadership .. > * Value chain Identify which activities contributing to cost leadership and differentiation .Analyze the source of competitive advantage. Primary Activities :  * Inbound Logistics Receiving, storing, and disseminating inputs. E.g., warehousing, inventory control. * Operations Transforming inputs into the final product form. * Outbound Logistics Collecting, storing and distributing the product to buyers. * Marketing and Sales Providing a means and incentive which allow buyers to purchase the product. * Service Providing service to enhance or maintain the value of the product.
 * Make cost assignment
 * Identify cost drivers
 * Understand cost dynamics
 * Control cost drivers
 * Reconfigure the value chain

Support Activities * Procurement. Function of purchasing inputs used in the value chain * Technology Development. * Human Resource Management * Firm Infrastructure  planning, finance, accounting, legal, etc.

= How to achieve cost advantage =



Differentiation :

• Emphasize on a unique source of differentiation in the Value Chain, rather than on products or markets only • Differentiation base on buyers’ value, not only difference that buyers do not value • Should consider the cost of differentiation.

Aseel Hirbawi

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