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CompetitiveLandscape2023 Post

The document discusses building and sustaining competitive advantage. It covers understanding the competitive landscape, building competitive advantage through assembling resources and capabilities, and setting up business models. It then discusses sustaining competitive advantage by understanding the sustainability of advantages and testing strategies. Finally, it discusses developing a sustainable competitive advantage by understanding industries and competitors over time.

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constantijn.coppye
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32 views15 pages

CompetitiveLandscape2023 Post

The document discusses building and sustaining competitive advantage. It covers understanding the competitive landscape, building competitive advantage through assembling resources and capabilities, and setting up business models. It then discusses sustaining competitive advantage by understanding the sustainability of advantages and testing strategies. Finally, it discusses developing a sustainable competitive advantage by understanding industries and competitors over time.

Uploaded by

constantijn.coppye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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The Competitive Landscape

Building Competitive Advantage


Sustaining Competitive Advantage
Developing a Sustainable Competitive Advantage
Topic 3
1. Understanding the Competitive Landscape The Competitive Landscape
2. Define the Scope of your Business
3. Select the Activity set of your Business
Topic 4
4. Assemble the needed Resources and develop the key Capabilities
Building Competitive
Advantage
5. Set up the Business Model to link Value Creation and Value Capture and
create a Virtuous Cycle
6. Understand the Sustainability of your Competitive Advantage Topic 5
Sustaining Competitive
7. Test your Strategy Advantage
The Competitive Landscape
Developing a Sustainable Competitive Advantage

1. Understanding the Competitive Landscape


2. Define the Scope of your Business
3. Select the Activity set of your Business
4. Assemble the needed Resources and develop the key Capabilities
5. Set up the Business Model to link Value Creation and Value Capture and
create a Virtuous Cycle
6. Understand the Sustainability of your Competitive Advantage
7. Test your Strategy
Performance differences between companies are difficult to explain
McGahan and Porter
find 18 %
Total variance in performance 100 %

Explained by stable 8.28 %


characteristics of industry

Explained by business cycle 7.84 %

Explained by competitive position 46.38 %

Not explained 37.50 %


Source: Richard R. Rumelt

General success factors do not appear to exist !


Strategy and the Drivers of Enterprise Value

Industry Value System


Sales
growth

Enterprise
Enterprise
value

Value
Resource
Margin Drivers of ROIC
utilization

Resources,
Scope Activities Capabilities &
Business Model

Firm Specific
Industry Attractiveness
• Industry attractiveness refers to the future average returns expected for firms
operating in this industry
• Depends on:
1. Longterm Trends: expectations about the obsolecence of activities linking
buyers and suppliers and/or core assets
Do: trend analysis, scenario planning,…
2. Definition of Industry: Product-Technology Combination (Markets interact
industries with customers)
3. Drivers of Value Capture at Industry Level
Average Returns across Industries

Porter (2008)
Is the U.S. Legal Marijuana
Industry an attactive
Industry?
What is the Average Value
Captured by a Player in the
Industry?
Porter’s 5-Forces Model
THREAT OF 2
NEW ENTRANTS

BARGAINING 5 RIVALRY AMONG 1 BARGAINING 4


POWER OF EXISTING POWER OF
SUPPLIERS COMPETITORS CUSTOMERS

THREAT OF
3
SUBSTITUTES

Competition for Profits (Value Capture) goes beyond established rivals.

Source: Porter, “The Five Competitive Forces that Shape Strategy”(2008).


The Industry Value System

Entry Substitutes Substitutes

Intermediate Final
Suppliers Rivals
Buyers Customer

Complements Complements

12
Industry Architecture & Bottlenecks
Computing Industry: 1990 - Present
Dynamics of Industries

Source: Bradley, C., Hirt, M, & S. Smit (2018) “Strategy: Beyond the Hockey Stick”
Dynamics of Industries

Jacobides and MacDuffie (2013)

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