Summary Class notes

Lesnotities
INTRODUCTION + CONELEARN
Competitive advantage
A comparative advantage can never be the source of an competitive advantage.
Comparative advantages: what you are good at. Like low labour costs in China, but everybody who
starts up a business in China can use these low labour costs. So the comparative advantage cannot be
a competitive advantage because it’s available to everybody.

What is culture?
Culture is the collective programming of the mind. Actions are understood and we can anticipate
how people will react. Having the same culture means having the same mindset. It is difficult to grasp
all aspects.
Conflicts within the same cultural framework are relatively easy to solve, because there are certain
ground rules. Problems that arise between cultures are a lot more difficult to solve because they
have another mindset or problems across frames (so culture is the same as frame, systems).
Often big opportunities lie outside that framework/culture, because if you only operate within the
same culture/framework there is no innovation. The innovative people question the framework we
live in and try to change it. All the disruption companies are thinking outside the framework/culture.
Cultural dimensions Hofstede:
 5 dimensions of culture IBS
 Power distance
o About how to view inequality in physical & intellectual capabilities
o High power distance culture:
 Inequality is good (e.g. age & seniority matter)
 Everyone has a place, some are high & others are low
 The powerful deserve privileges & should not hide their power
 Uncertainty avoidance
o About how tolerable they are to uncertainty
o High uncertainty avoidance culture
 Conflict should be avoided
 Authorities are always correct
 Laws & rules should be followed
 Individualism/ collectivism
o About relationship between an individual and the people around him
o Individualistic culture:
 People are responsible for themselves
 Individual achievement is ideal
 People should not be emotionally dependent on groups
o Collectivistic culture:
 An individual’s identity is based on his group membership
 Group decision making is best
 Groups protect individuals in exchange for loyalty to the group
 Rewards & recognition go to the group
 Masculinity/ femininity
o About the relationship between gender and work roles
o Masculine culture
 Gender roles should be clearly distinguished
 Men are assertive and dominant

,  Men should be decisive
 Work has priority over other duties; work-life balance in favour of work
 Advancement, success & money are important
 Long term orientation
= Confucian dynamism
o About attitudes towards time, persistence, status, protection of face, respect for
tradition & reciprocity of gifts & favours
o High long term oriented cultures
 Strategic planning is important
 You need to be willing to invest
 Slower results are accepted
 Persistence to achieve goals
 Sensitivity to social relationships
 Pragmatic adaption: focus on what can be useful to you

Strategy in 3 steps
Why do we need a strategy?
To reach your LT goals, to create a competitive advantage, to make profit, social purpose, and to
achieve consistency (align everything internally & eternally). A lot is about framing & looking at the
long term, it’s about making money in a sustainable & durable way.
The strategy frame is more important than today’s sales, yet a lot of people forget that.
=> Strategy is the search for LT outperformance
Are we making money?
 Industry analysis
 Happens to be in the right market, at right time in right place
 Competitive advantage
 Unique competences, strategic assets
 Sustainable comp advantage in our industry
 Resource based view
= start form getting to know your own resources & start looking at competitive advantages
 Afterwards: look at resources & countries you should be in etc.
You need to know, understand, evaluate & adapt. If you’re making money and you don’t know why,
it’s bad. This way you can’t keep up the success; it can even lead to failure because you think you’re
doing good.
You have to ask yourself 3 basic questions: if you’re making money, is it because:
- You’re in the right industry (market, place & time)?
- Because of a sustainable competitive advantage in what you do?
→ Competitive advantage & generic strategies
- Because you have unique competences/ strategic assets that others don’t have?
= Core competence
→ Resource-based view
Resource based theory CA&S
 Conditions for R&C to be a source of a sustainable competitive advantage
 They’re scarce
 They’re valuable
 Imperfect mobility
o Most R&C are immobile, 2 exceptions
o Employees/ individuals are mobile
 Can go to the highest bidder & leave the firm