come pt it iveness

8/10/2019 Come Pt It Iveness

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Simultaneous Revolutions

The

Business

New

Competitors

New Political

Agendas

New Technologies

New Employeesand New Values

Increasing

Customer Expectation

New Rules

of Competition

Industry Structure

Changes

New Regulatory

Environment


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Systematic Approach to IS

Vision

Strategy

Tactics

Business Plan

Competitive Options

Roles, Roles, and Relationships

Redefine/Define

Telecommunications as the Delivery Vehicle

Success Factor Profile


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Three Roles of IS

Efficiency

Effectiveness

Competitive Advantage


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Three Roles of IS

Efficiency Doing things better overall

Effectiveness Doing better things within the organization

Competitive Advantage Doing better and new things for the

customer


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Business Competitive

Environment

The global market will come to you, if you dont

come to it.


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Competition Can Be

Local

Regional

National International

Going to be taking a look at competition,defining it and then focusing on global

competition.


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Why Do We Care?


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What Is Competitiveness?

The degree to which a nation can, under free and fair market

conditions. Produce goods and services that will meet the test

of international markets while simultaneously maintaining or

expanding the real income of its citizens

Three Inputs to improving domestic performance

Human Resources

Capital Technology


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Competitiveness: A Link to National Goals

Human

Resources

Capital

Technology

Improved

Domestic

Performance

More and

Better Jobs

Increased

Standard of

Living

Stronger

National

Security

Decreased

Budget

Deficit

Trade

Policy

New

Competition

Increased

World Market

Competitiveness

Reduced

Trade

Deficit

Figure 2-1


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How does a company gain a

competitive advantage?

Provide a value to customers

Real

Perceived

Knowing/Understanding

- Products- Customers

- Competitors


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International Competitive Advantage

The way companies achieve competitive

advantage in the global industry is based on

the role played by the home nation.


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The Diamond National Advantage

Firm Strategy,

Structure and

Rivalry

Factor

Conditions

Demand

Conditions

Related and

Supporting

Industries

Chance

Government

Fig. 2-2


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The Governments Role

Catalyst

Challenger


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Business CompetitiveEnvironment


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1. The definition of competitiveness.

2. The key elements of competitive advantage.

3. The role of the nation relative to companiesthat compete successfully on a global basis.

4. The role of government within a nation.

While contemplating the idea that information

technology could make a difference.

Position Some Important Factors


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Competitiveness is the Pivotal

Business Issue

in the 21st Century


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Global Economy

Why the emphasis on globalization and

the importance of global competition?


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The global market will come toyou, if you dont go to it.

Business Environment


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An Essential Roadmap?

Do nations, companies and individuals need to build

wealth in a knowledge-based global economy?

How significant in creating wealth are breakthroughtechnologies in microelectronics, biotechnology, new

materials, telecommunications, robotics, and

computers?

Do these factors explain why relatively new

industries are growing explosively and existing

industries are being transformed?


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Michael Porter Contributions

1985 - Presidential Commission and

Competitiveness Definition

1987 - Competitive Model and Value Chain

1990 - Competitiveness of Nations Study

Present - Institute for Strategy and Competitiveness,

Harvard Business School


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Competitiveness Definition

The degree to which a nation can, under

free and fair market conditions, produce

goods and services that will meet the test ofinternational markets while simultaneously

maintaining or expanding the real income

of its citizens.


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How Does a Company Compete?

If the bottom line to a business is

profit, then the top line is value to

customer.


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A Good Optional Strategy?

To produce quality products and

services through effective leadershipof skilled employees using advanced

methods through the innovative use

of technology.


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A Good Competitor:

1. Knows its products and services.

2. Knows its customers.

3. Knows its competitors.


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Competitiveness of Nations

The striking internationalization of competition

in the decades after World War II has been

accompanied by major shifts in the economic

fortunes of nations and their firms.

1. How did this happen?

3. What can companies and countries do with this

knowledge?

2. What can one learn from this?


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Why (how) are companies in a

particular nation able to gain adominant competitive position in

a specific industry against the

worlds best competitors?


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Helps to anticipate from which country future

competition is likely to come from?

Helps to understand at least in basic terms the

types of companies that will be primary

competitors?

Could help to anticipate what could be their

primary competitive strategies?

The point of all of this:


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Organizations Compete

Within Industries

What is the role of the nation?

Nations do not compete!


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Porter Companies and Industries

Economists Unit Cost of Labor Adjustedfor Inflation

Politicians Balance of Payment

Companies The Right Strategies toCompete in Global Markets

Previous Basis of Competitive Analysis


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The industry was the basic unit ofanalysis.

Industries are organizations that

directly compete with each other.

Some industries are well-defined,while others are not.

To Understand Competitiveness


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The role of the nation has

increased as competition has

shifted more to the creation and

assimilation of knowledge.

A Major Message


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The ways that firms achieve and

sustain competitive advantage in

global industries provide the necessary

foundation for understanding the role

of the home nation in the process.


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Firm Strategy,

Structure andRivalry

Factor

Conditions

Demand

Conditions

Related and

Supporting

Industries

Diamond of National Advantage

Chance

Government


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Natural Resources

Labor Pool

Interest Rates and Currency Value

Economies of Scale

Competitive Success Is Not the Direct Result of:

. . . Traditional Economic Thinking


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The nations position in factors of production

that are prerequisites to compete in a specific

industry.

Infrastructure

People Skills and Training

Factors Unique to a Specific Industry

A nation usually does not inherit but creates

the most important factors.

Factor Conditions


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Physical Resources:

Abundance, quality, accessibility and cost of

land, water, minerals, timber, hydroelectric

power, etc.

Climatic conditions.

Location and geographic size.

Time zone re: global communication.

Factor Conditions


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Infrastructure: Type, quality, and user cost.

Transportation

Communication

Mail/freight Delivery

Health Care

Schools Housing Stock

. . .Quality of life--to live and to work.

Factor Conditions


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Capital Resources: (Amount and cost of

money)

Secured Debt

Unsecured Debt

Equity and Venture Capital

Savings Rate

Tax Incentives

Fiscal and Monetary Policies

Factor Conditions


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Knowledge Resources: Scientific, technical and

market knowledge that pertains to goods and

services.

Universities

Government Research Facilities

Private Research Facilities

Business and Scientific Literature

Market Research Databases

Trade Associations

Factor Conditions


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Human, knowledge and capital

factors are mobile.

Other elements of the diamond

are more important to explaininternational success.

Factor Conditions


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Competitive advantage from

factor conditions depends onhow effectively and efficiently

they are mobilized and

deployed in the economy.

Therefore


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The sophistication of customer demand.

The more demanding the local buyers the

better to hone the global competitiveness ofhome-based companies..

The local market provides an early picture of

the emergence of buyer needs.

This factor is a major positioner for success.

Demand Conditions


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Successful companies need suppliers who are:

1. Home-based.

2. Competitive on an international level.A close relationship with suppliers contributes

to innovation and upgrading of products.

Prompts a range of interconnected suppliers

that are all internationally competitive.

Related and Supporting

Industries


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The way in which companies arecreated, managed and choose to

compete domestically.

First Strategy, Structure and

Rivalry


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Study Findings:

Company and individual goals vary.

No one management style is universally

appropriate.

Differences in background of CEO and

different company structures.

Company structures are different. Contrasts in people motivation to work and

learn.

Career choices of the best students varies.

Firm Strategy, Structure and Rivalry


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Firm Strategy, Structure and Rivalry

Italy

Joined the ranks of advanced nations in the past two decades.

Overall growth in world export share was second only toJapan.

Illustrates the power of a growing alignment between national

circumstances and the shifting demands of modern globalcompetition.

Benefited from a shift from standardized, mass-produced

products toward more customized, higher-style, higher-

quality goods. In many cases style was combined with investment in state-

of-the-art production equipment.

Achieved advantage based on segmentation, differentiation

and process innovation.


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Serve as a challenger and catalyst to companies to

compete successfully:

Focus on specialized factor creation.

Avoid intervening in capital factor and currency markets.

Enforce strict product, safety and environmental

standards.

Limit cooperation among industry rivals.

Promote goals that lead to sustained investment.

Deregulate competitors.

Enforce domestic antitrust policies.

Reject managed trade.

Role of Government


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Eveready Batteries

Employs 350 people in Kenya.

40% of Eveready batteries sold in Kenya arecounterfeit.

If this continues, the company will terminate itsoperation in Kenya.


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Kenya

80% of counterfeit goods are estimated to come

from China.

The business community blames much of theirtroubles on high costs, such as power and water,

and government corruption.

The government run port of Mombasa is notorious

for bribery and kick-backs.


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Companies gain an advantage

against competitors by respondingto pressures and challenges.


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