Date post: | 11-Aug-2015 |
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Competitive AdvantageStrategic Human Resource Management
Prepared By
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Manu Melwin JoyAssistant Professor
Ilahia School of Management Studies
Kerala, India.Phone – 9744551114
Mail – [email protected]
The concept of Strategy
• The concept of strategy is
based on three subsidiary
concepts:
– Competitive advantage.
– Distinctive capabilities and
– Strategic fit.
Competitive advantage• The concept of competitive
advantage was formulated by Michael Porter (1985). Competitive advantage, Porter asserts, arises out of a firm creating value for its customers. To achieve it, firms select markets in which they can excel and present a moving target to their competitors by continually improving their position.
Competitive advantage• Porter emphasized the
importance of: differentiation, which consists of offering a product or service ‘that is perceived industry-wise as being unique’; and focus – seeing a particular buyer group or product market ‘more effectively or efficiently than competitors who compete more broadly’.
Competitive advantage• He then developed his well-
known framework of three generic strategies that organizations can use to gain competitive advantage. These are:– Innovation – being the unique
producer;– Quality – delivering high-
quality goods and services to customers;
– Cost leadership – the planned result of policies aimed at ‘managing away expense’.
Competitive advantage• A distinction has been made
by Barney (1991) between the competitive advantage that a firm presently enjoys but others will be able to copy, and sustained competitive advantage, which competitors cannot imitate. This leads to the important concept of distinctive capabilities.