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Creating Advantage: Synergy and vision versus Opportunities Sustainable Competitive Advantage

SCA
It is an element or combination of elements of the business strategy that provides a meaningful advantage over both existing and future competitors. Wal-Mart has a cost advantage because of its scales . Southwest Airlines has a fun personality and a point to point model. Dell computers efficient direct sales model makes customized computers.

Sustainable competitive Advantage


The Way you compete Product strategy Positioning Strategy Manufacturing Strategy Distribution Strategy

Basis of Competition Assets and compete

SCA
What you offer Value Proposition Where you compete Product market selection Competitors selection

Basis of Competition Asset and Competition


Assets and competencies are the most sustainable elements of a business strategy because they are difficult to counter.
What you offer the value proposition An effective SCA should be visible to customers and provide value position. A product reliability is not visible to customers but it should be made visible through advertising or product design, leads to reliability positioning strategy. E.g. Gillette maintain technological superiority.

A solid value proposition can fail if a key ingredient is missing. Procter and Gamble Pringles Potato chips had a host of assets, such as consistent product, long shelf life, a crushproof container, and national distribution. The problem was that these attributes were valued only if the taste was perceived to be good. As a result, Pringles ability to penetrate the snack market was limited for decades until it made progress in term of both actual and perceived taste.

How are Pringles made? Company facts:- We're glad you noticed that Pringles are shaped differently and taste different. While Pringles contain the same basic ingredients found in other chip products, we take a totally radical approach to the way we mix our ingredients. We buy potatoes in the form of potato flakes and then add just enough water and other wholesome ingredients to make a smooth potato dough. The dough is cut in uniform shapes and these cut-outs are placed on pre-formed and Pringles-shaped carriers. The crisps are quick-fried and seasoned just right. Finally, they go to the stack-packer and then on to your favorite store.

In most areas of the world local health regulations require that food cannot sit under a heat lamp for more than 16 minutes before it is deemed inconsumable by the public. It is at this time interval that one of the largest suppliers of fast food for the world supplies one of the largest manufacturers of potato chips their base ingredient. McDonald's carefully collects unserved French fries and places them into specially created dehydrators. The remains are then flaked and placed into airtight containers which are then shipped to Pringles factories all over the world.

Where You compete: the Product Market Served


The important determinant for SCA is the choice of the target product market. A well-defined strategy supported by assets and competencies can fail because it does not work in market place. One way to create market place value is to be relevant to customers.

Canada Dry : RIP ( 1995-1999)


Brand : Canada Dry Company : Cadbury Schweppes ( Later Coca Cola) Agency : Mudra

Canada Dry was launched in India in 1995. The brand ,from Cadbury Schweppes ,was a highly popular brand of softdrinks across the globe. Canada Dry was a much hyped brand because it was from the house of Cadbury. Cadbury Schweppes launched Canada Dry and Orange Crush in the Indian market with much fanfare. Canada Dry was a Champagne Softdrink.

The brand has positioned itself as a champagne and the taste was different and refreshing. The brand was also promoted heavily in various media. The ad featuring the snow and tiger brings back the nostalgia about this brand. The brand was positioned as a premium coldrink . The brand gained immediate acceptance because of its association with Cadbury. The brand had the potential to become a premium softdrink brand in India. But alas, the brand did not last too long in the market. In 1999 CocaCola took over the beverages business of Cadbury Schweppes and like GoldSpot and Limca , Coke killed this brand.

It is sad to see such brands being killed for no reason connected with customers. The only reason for Coke to kill these brands was to make way for Coke's original brands. In the case of Canada Dry , the brand only had a negligible presence in the Indian market. Look at the Indian market now - Is there a premium soft drink brand in India ? Neither Coke or Pepsi was able to create a premium soft drinks category in India. They have not even tried yet.......

SCA Versus Key Success Factor


SCA It is an assets or competence that is the basis for a continuing advantage. E.g. Hyundai ability to be superior than competitor Key Success Factor It is an asset or competence needed to compete. E.g. distribution network for automobile.

What business managers name as Their SCAs


Reputation for quality Customer service/product support Name recognition/high profile Retail good management and engineering staff Low-cost production Financial resources Product line breadth Effective sales force Market Share Product characteristics/differentiation

Strategic Option- Routes to an SCA


Quality Being Global Innovation Product attributes

Product design

Focus

Strategic Option

Product Line Breath

value Corporate Social Responsibility

Customer intimacy

Brand Familiarity

Synergy between business units can provide an SCA.


Synergy means that the whole is more than the sum in parts. But here it means that two businesses or two product-market strategies operating together will be superior to the same two business operating independently. The result is increased customer value and increased sale, lower operating cost, Reduced investment.

Market/submarket
Ford Figo A thousand Ford engineers worked to build the Figo. It has sold 30,000 units in 25 weeks and will be sold in 50 countries including Mexico, North Africa and the Middle East. Toyota Etios: At least 2,000 engineers from India and Japan worked for over four years on the low-cost car. Etios will be launched in Brazil, South Africa and China. Nokia learn English Application- the service, developed for the Indian market, has

6 million user worldwide. The company is looking to take its new consumer, such as the Hispanic population in the U.S. it also plans to replicate its tie-up with IGNOU globally. Nestle Maggi Masala-ae-Magic: the high nutrient and the low cost variant of Maggi noodles developed for the rural poor in India & Pakistan, is on its way to Australia and New Zealand. Pepsi Kurkure and Nimbooz- After tasting success in India, PepsiCo plans to launch these products globally.

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