Experience curve-effects
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• capture both learning effects and process innovations
• process innovation: a new method or technology to produce an existing
product
• driven by new underlying technology while holding cumulative output
constant
Brand Image
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, • It may be difficult to differentiate based on product features
• Customers tend to reach for the best-known brand
• Brand image is typically developed by the marketing functions
Risk Capital
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- money provided for an equity share in a company
- cannot be recovered if the firm goes bankrupt
IT Boom/AI Boom
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- Tech companies grew in market cap
- Shifted from mere IT company to working on AI etc
- Depends on trends, value of company changes
Cost of input factors
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access to lower-cost input factors such as raw materials, capital labor, and
land
,What do core competencies arise from?
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two complementary sources: resources and capabilities
Valuable
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- resources that enable firms to offer products/services adding value to
customers through
- increasing customer's perceived value
- lowering production cost (ex: through efficient manufacturing process)
- contribute to a competitive advantage
- ex: Beats Electronics: Design and marketing of premium headphones
(retail price = $150 ~ $450 / Production Cost = ~$15)
What are core competencies?
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Unique strengths embedded deep within a firm
Why is the Blue Ocean Strategy Difficult to implement?
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, ‣ Requires the reconciliation of fundamentally different strategic positions
(differentiation and low costs)
‣ requires distinct internal value chain activities
‣ in reality, firms are more likely to "stuck in the middle" than to pursue the
blue ocean strategy
Total Return to Shareholders
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- stock price appreciation plus dividends
- from the perspective of shareholders, the measure of competitive
advantage is the return on their risk capital
What do the environmental factors create?
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Opportunities and threats
Assessment of concentration
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- Less concentrated (competitive markets): HHI below 1500 (or 1.5)
- Moderately concentrated markets: HHI between 1500 and 2500 (or 0.15 to
0.25)
- Highly concentrated (monopolistic) markets: HHI above 2500 (or 0.25)
Give this one a try later!
• capture both learning effects and process innovations
• process innovation: a new method or technology to produce an existing
product
• driven by new underlying technology while holding cumulative output
constant
Brand Image
Give this one a try later!
, • It may be difficult to differentiate based on product features
• Customers tend to reach for the best-known brand
• Brand image is typically developed by the marketing functions
Risk Capital
Give this one a try later!
- money provided for an equity share in a company
- cannot be recovered if the firm goes bankrupt
IT Boom/AI Boom
Give this one a try later!
- Tech companies grew in market cap
- Shifted from mere IT company to working on AI etc
- Depends on trends, value of company changes
Cost of input factors
Give this one a try later!
access to lower-cost input factors such as raw materials, capital labor, and
land
,What do core competencies arise from?
Give this one a try later!
two complementary sources: resources and capabilities
Valuable
Give this one a try later!
- resources that enable firms to offer products/services adding value to
customers through
- increasing customer's perceived value
- lowering production cost (ex: through efficient manufacturing process)
- contribute to a competitive advantage
- ex: Beats Electronics: Design and marketing of premium headphones
(retail price = $150 ~ $450 / Production Cost = ~$15)
What are core competencies?
Give this one a try later!
Unique strengths embedded deep within a firm
Why is the Blue Ocean Strategy Difficult to implement?
Give this one a try later!
, ‣ Requires the reconciliation of fundamentally different strategic positions
(differentiation and low costs)
‣ requires distinct internal value chain activities
‣ in reality, firms are more likely to "stuck in the middle" than to pursue the
blue ocean strategy
Total Return to Shareholders
Give this one a try later!
- stock price appreciation plus dividends
- from the perspective of shareholders, the measure of competitive
advantage is the return on their risk capital
What do the environmental factors create?
Give this one a try later!
Opportunities and threats
Assessment of concentration
Give this one a try later!
- Less concentrated (competitive markets): HHI below 1500 (or 1.5)
- Moderately concentrated markets: HHI between 1500 and 2500 (or 0.15 to
0.25)
- Highly concentrated (monopolistic) markets: HHI above 2500 (or 0.25)
