Competitive Advantage
An advantage gained by a business when it can provide the same value as its competitors but at a lower price, or can generate higher prices by providing more value through differentiation.
Michael E. Porter - Youtube Video
Cost Leadership
Differentiation Leadership
Cost Focus
Differentiation Focus
The End of Competitive Advantage - Rita Gunther McGrath
Michael E. Porter
Rita Gunther McGrath
Warren Buffett
Peter Thiel
Creating Competitive Advantage
Determinants of Industry Profitability
  •  Rivalry Among Existing Competitors
  •  Threat of New Entrants
  •  Threat of Substitutes
  •  Bargaining Power of Suppliers
  •  Bargaining Power of Buyers
Rivalry Determinants
  •  Industry Growth
  •  Product Differences
  •  Brand Identity
  •  Switching Costs
  •  Barriers to Exit
  •  Diversity of Competitors
Types of Competitive Advantage
  •  Low Cost
  •  Differentiation
  •  Narrow / Focus
  •  Broad
Worst you can do is stay in the middle where question mark is. You need to pick your business strategy. Shift your business positioning to one of the corners.
Competitive Positioning
Low Cost
  •  Create a good product
  •  Draw advantage from many sources
  •  Study the competition
  •  Make cost a part of company culture
  •  Create value that justifies premium
  •  More than physical product
  •  Communicate differentiation
  •  Be a moving target
  •  Sharp focus on target segment
  •  Find segment with greater needs
  •  Stay focused!
  •  Find segment with lower needs
  •  Invest where needed
Broader Lessons About Positioning
  •  Don't ignore industry structure!
  •  Choose a different strategy
  •  Dare to make trade-offs
The Process of Developing a Strategy
  •  Create a formal process
  •  Use a multi-functional team
  •  Communicate the strategy: inside and outside
  •  Be consistent over time
  •  Use proper measurement: Find underlying measures
Types of Competitive Advantage - Version 2
  •  Low-Cost Operator
  •  Brand
  •  Proprietary "Technology"
  •  Network Effects
  •  Talent
  •  Scarce Ownership or Access
Best Competitive Advantages Examples
  •  Coca-Cola
  •  Proctor & Gamble
  •  Apple
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