Meeks 17 - Competitive Advantage in Organizational Strategy

In this lesson, Jean Meeks-Koch will explain competitive advantage and how it is affected by resources, products and services, and the people in the company. You will also learn the qualities of competitive advantage and how you might gain it in your own business.

Transcript: 
<transcript> <points> <main_point time="0"> <text><![CDATA[Hello my name is Jean Meeks-Koch, and today we’re going to focus on: what is competitive advantage]]></text> </main_point> <main_point time="7"> <text><![CDATA[and why is this a cornerstone to a successful organization and its organizational strategy. So let’s begin.]]></text> </main_point> <main_point time="17"> <text><![CDATA[In order to really describe what a sustainable competitive advantage is,]]></text> </main_point> <main_point time="22"> <text><![CDATA[and this is the depth, the deep, the foundational piece of organizations,]]></text> </main_point> <main_point time="28"> <text><![CDATA[we first have to understand competitive advantage and so we are going to start with some basics on it.]]></text> </main_point> <main_point time="34"> <text><![CDATA[We are going to start with your company and first identifying what are your company’s resources.]]></text> </main_point> <main_point time="41"> <text><![CDATA[So I have a question for you:]]></text> </main_point> <main_point time="42"> <text><![CDATA[Can you list four top resources in your organization?]]></text> </main_point> <main_point time="49"> <text><![CDATA[Well I bet some of you might have said the people.]]></text> </main_point> <main_point time="52"> <text><![CDATA[Yeah, us the people, the product or the service, what we’re selling or what we have to offer.]]></text> </main_point> <main_point time="59"> <text><![CDATA[Or maybe even the building we happen to work in.]]></text> </main_point> <main_point time="63"> <text><![CDATA[If you mentioned any of the above, you are absolutely correct.]]></text> </main_point> <main_point time="67"> <text><![CDATA[These are all resources. So when we look at what are a company’s resources, we need to be able to identify them.]]></text> </main_point> <main_point time="73"> <text><![CDATA[They are all of the assets that we have, all of the things that have value.]]></text> </main_point> <main_point time="78"> <text><![CDATA[They are also not only assets, tangible assets that you can touch, you can see, you can feel,]]></text> </main_point> <main_point time="84"> <text><![CDATA[there’s also intangible assets. For example, like the goodwill we have. Our name, our brand,]]></text> </main_point> <main_point time="91"> <text><![CDATA[you can’t touch a name you can’t touch a brand. But if you look at somebody like Nike,]]></text> </main_point> <main_point time="97"> <text><![CDATA[that has a lot of brand recognition in the market place, so the Nike brand and the swoosh, okay.]]></text> </main_point> <main_point time="103"> <text><![CDATA[Their logo, that has lot of brand, that’s a valuable intangible asset.]]></text> </main_point> <main_point time="108"> <text><![CDATA[The second resource is capabilities. What are the talents that we have?]]></text> </main_point> <main_point time="114"> <text><![CDATA[What are the capabilities that each individual has in the workplace?]]></text> </main_point> <main_point time="118"> <text><![CDATA[What do they contribute? Their capabilities, their intellectual piece.]]></text> </main_point> <main_point time="123"> <text><![CDATA[That’s a very valuable resource and a high price commodity right now in the marketplace.]]></text> </main_point> <main_point time="128"> <text><![CDATA[The third one is our processes. We all do things in a unique way in our companies.]]></text> </main_point> <main_point time="136"> <text><![CDATA[There are certain ways we might do something that allows us to be more efficient and more effective.]]></text> </main_point> <main_point time="141"> <text><![CDATA[These particular processes, when they are mapped out, they have a lot of value.]]></text> </main_point> <main_point time="146"> <text><![CDATA[Because it’s the way we go about doing or producing or selling our product or service and providing it to our consumers,]]></text> </main_point> <main_point time="158"> <text><![CDATA[our clients, that other people might not do that way. That actually is our benefit.]]></text> </main_point> <main_point time="163"> <text><![CDATA[The fourth is employee’s time. Time is valuable, time is precious, we only have so much time.]]></text> </main_point> <main_point time="169"> <text><![CDATA[There’s only 24 hours in a day, there’s only seven days in a week, we can’t create more time.]]></text> </main_point> <main_point time="175"> <text><![CDATA[So the use of employee time and how we manage it is a very valuable resource.]]></text> </main_point> <main_point time="182"> <text><![CDATA[The next one is information. The ability to gather really good information, acquire really good data,]]></text> </main_point> <main_point time="189"> <text><![CDATA[and then to be able to discern the information. What’s relevant to what we are trying to accomplish and what’s not,]]></text> </main_point> <main_point time="195"> <text><![CDATA[is a very important resource and capability. So how we go about gathering information, what kind of technology do we have?]]></text> </main_point> <main_point time="204"> <text><![CDATA[What kind of tools do we have for our information gathering that allows us to be competitive in the marketplace?]]></text> </main_point> <main_point time="211"> <text><![CDATA[That’s a valuable resource.]]></text> </main_point> <main_point time="213"> <text><![CDATA[And last but most important is our knowledge.]]></text> </main_point> <main_point time="216"> <text><![CDATA[What is our knowledge of the industry?]]></text> </main_point> <main_point time="219"> <text><![CDATA[How knowledgeable are we are?]]></text> </main_point> <main_point time="220"> <text><![CDATA[How often do we stay up with the change in our industry, in our marketplace?]]></text> </main_point> <main_point time="225"> <text><![CDATA[This ability to grapple and acquire knowledge and grow from it is very powerful.]]></text> </main_point> <main_point time="232"> <text><![CDATA[And so these are all the resources that a company controls and they are very important to know and understand and be respectful of.]]></text> </main_point> <main_point time="239"> <text><![CDATA[So I have a multiple choice question for you.]]></text> </main_point> <main_point time="242"> <text><![CDATA[What do you think is the most important reason a company acquires a particular resource?]]></text> </main_point> <main_point time="250"> <text><![CDATA[Well if you said D, you’re absolutely correct A and B are accurate but again they are not the most important resource,]]></text> </main_point> <main_point time="258"> <text><![CDATA[the most important resource is really to create this competitive advantage over our competitors.]]></text> </main_point> <main_point time="264"> <text><![CDATA[We want to get that market share, so we have to create that competitive advantage with every resource we bring in,]]></text> </main_point> <main_point time="271"> <text><![CDATA[and if it’s not going to do that you need to think twice about the acquisition of that asset.]]></text> </main_point> <main_point time="278"> <text><![CDATA[So the idea with this discussion is, we were talking about this idea of competitive advantage and why is it important to a company.]]></text> </main_point> <main_point time="286"> <text><![CDATA[So let’s go and define now that we have defined resources and why are they important, let’s define competitive advantage a little bit.]]></text> </main_point> <main_point time="295"> <text><![CDATA[Competitive advantage provides great value for customers than what our competitors can provide.]]></text> </main_point> <main_point time="302"> <text><![CDATA[So when a customer looks at us what we are providing they see as greater value than our competitors. That’s our competitive advantage.]]></text> </main_point> <main_point time="313"> <text><![CDATA[So it’s the value that the customer sees. So let’s give an example: we have McDonald and we have Burger King, okay.]]></text> </main_point> <main_point time="320"> <text><![CDATA[Now you may like going to McDonald’s and you might like going to Burger king. Why?]]></text> </main_point> <main_point time="326"> <text><![CDATA[What’s the competitive advantage?]]></text> </main_point> <main_point time="328"> <text><![CDATA[Why would people value McDonald’s over Burger King or vice versa?]]></text> </main_point> <main_point time="334"> <text><![CDATA[What is it in the eyes of that customer? What draws that customer?]]></text> </main_point> <main_point time="339"> <text><![CDATA[That would be McDonald’s or Burger King’s competitive advantage.]]></text> </main_point> <main_point time="344"> <text><![CDATA[So understanding that about your company becomes very important.]]></text> </main_point> <main_point time="349"> <text><![CDATA[So as an organization, some of the things that we must decide, in order to figure out our competitive advantage,]]></text> </main_point> <main_point time="356"> <text><![CDATA[is what business or industry are we really in?]]></text> </main_point> <main_point time="359"> <text><![CDATA[What is that?]]></text> </main_point> <main_point time="360"> <text><![CDATA[Where are we choosing to play?]]></text> </main_point> <main_point time="362"> <text><![CDATA[What arena are we playing within?]]></text> </main_point> <main_point time="365"> <text><![CDATA[And what do we really have to offer?]]></text> </main_point> <main_point time="367"> <text><![CDATA[What are we offering to our consumers or our clients, that they see value in toward that target population?]]></text> </main_point> <main_point time="374"> <text><![CDATA[What are we actually offering?]]></text> </main_point> <main_point time="377"> <text><![CDATA[And then once we realize what do we have of value to offer, how are we going to go about marketing that?]]></text> </main_point> <main_point time="383"> <text><![CDATA[What does that marketing look like?]]></text> </main_point> <main_point time="385"> <text><![CDATA[So all together, this starts providing us a competitive advantage.]]></text> </main_point> <main_point time="391"> <text><![CDATA[These three questions start setting the stage that sets us apart.]]></text> </main_point> <main_point time="396"> <text><![CDATA[So our competitive advantage really helps us frame our organizational strategy.]]></text> </main_point> <main_point time="401"> <text><![CDATA[Because without understanding our competitive advantage and why people see value in us and what is it about us that sets apart,]]></text> </main_point> <main_point time="408"> <text><![CDATA[we can’t get to our desired future, we can’t get to the vision that we want.]]></text> </main_point> <main_point time="414"> <text><![CDATA[We can’t accomplish that within our company.]]></text> </main_point> <main_point time="416"> <text><![CDATA[So this now circles us all the way back to resource.]]></text> </main_point> <main_point time="420"> <text><![CDATA[These are our assets which consist of our capabilities, processes, employee time or information or knowledge]]></text> </main_point> <main_point time="429"> <text><![CDATA[that we really need to improve in the effectiveness and efficiency of our organization.]]></text> </main_point> <main_point time="435"> <text><![CDATA[So by recognizing and really developing our assets we can absolutely strengthen our competitive advantage.]]></text> </main_point> <main_point time="442"> <text><![CDATA[Now once we have our competitive advantage dialed in, how do we make that sustainable?]]></text> </main_point> <main_point time="449"> <text><![CDATA[Because ultimately, the companies that have a sustainable competitive advantage have a higher value in the marketplace than companies that don’t.]]></text> </main_point> <main_point time="460"> <text><![CDATA[So what does it mean to have a sustainable competitive advantage?]]></text> </main_point> <main_point time="464"> <text><![CDATA[So this is a competitive advantage that another company cannot easily duplicate.]]></text> </main_point> <main_point time="470"> <text><![CDATA[It’s very difficult for them to duplicate it.]]></text> </main_point> <main_point time="473"> <text><![CDATA[So can you think of a company that you consider might have a sustainable competitive advantage?]]></text> </main_point> <main_point time="480"> <text><![CDATA[I can, the first one that absolutely comes to my mind is Apple.]]></text> </main_point> <main_point time="486"> <text><![CDATA[Apple. It has an innovative mind, it has closed technology.]]></text> </main_point> <main_point time="490"> <text><![CDATA[When it has marketed a new product, it’s taken a first mover advantage, far surpassing others in the industry.]]></text> </main_point> <main_point time="500"> <text><![CDATA[So they really have, at this point in time, a sustainable competitive advantage.]]></text> </main_point> <main_point time="504"> <text><![CDATA[When you look at the iPod and it was launched, look at it now, I mean nobody has come close to touching that.]]></text> </main_point> <main_point time="513"> <text><![CDATA[Look at the iPad, same kind of energy getting created.]]></text> </main_point> <main_point time="517"> <text><![CDATA[We have other brands trying to compete in that marketplace but this Apple. For some reason people will stand in line and wait for it to come out,]]></text> </main_point> <main_point time="525"> <text><![CDATA[when we might have just bought one, the iPad two. And then people stand in line for the iPad three.]]></text> </main_point> <main_point time="532"> <text><![CDATA[There’s something that’s created this sustainable competitive advantage, where everybody wants to be part of that bandwagon.]]></text> </main_point> <main_point time="540"> <text><![CDATA[So to have a sustainable competitive advantage, your resources have to posses these four characteristics.]]></text> </main_point> <main_point time="549"> <text><![CDATA[And these are paramount. So they have to be valuable, they have to be considered valuable, have to be considered rare,]]></text> </main_point> <main_point time="556"> <text><![CDATA[they have to be imperfectly imitable. That’s a mouthful; imperfectly imitable meaning it’s really hard to imitate them.]]></text> </main_point> <main_point time="567"> <text><![CDATA[And then non-substitutable, meaning your consumers, the population won’t accept something as a substitute.]]></text> </main_point> <main_point time="575"> <text><![CDATA[So I’ll give you an example of a sustainable competitive advantage.]]></text> </main_point> <main_point time="580"> <text><![CDATA[I look at De Beers diamonds, they control the majority of the diamond mines and the diamond market, like it or not they do.]]></text> </main_point> <main_point time="590"> <text><![CDATA[So why do they have a sustainable competitive advantage?]]></text> </main_point> <main_point time="593"> <text><![CDATA[Why isn’t my cubic zirconia as important as the De Beers diamond?]]></text> </main_point> <main_point time="599"> <text><![CDATA[Well number one, it is valuable, right? Diamonds have a value, we have a big dollar value to it.]]></text> </main_point> <main_point time="608"> <text><![CDATA[Number two, it’s rare isn’t it? There is a rarity to it.]]></text> </main_point> <main_point time="613"> <text><![CDATA[And number three is, it’s hard to imitate a diamond.]]></text> </main_point> <main_point time="616"> <text><![CDATA[Now you can turn around and look at a ring and say “is that a cubic zirconia?”]]></text> </main_point> <main_point time="621"> <text><![CDATA[or "is that a real diamond?" It might be hard to tell.]]></text> </main_point> <main_point time="624"> <text><![CDATA[But I’ll tell you, I’m taking it from the female side here,]]></text> </main_point> <main_point time="628"> <text><![CDATA[if you give me a cubic zirconia and you think you’re passing it off as a diamond I’m not going to be very happy with you.]]></text> </main_point> <main_point time="634"> <text><![CDATA[Again we haven’t quite accepted the cubic zirconia as the engagement ring, have we?]]></text> </main_point> <main_point time="640"> <text><![CDATA[You know, that’s a societal thing and so there isn’t a lot of substitutes right?]]></text> </main_point> <main_point time="645"> <text><![CDATA[It’s really non-substitutable. They’ve created it in the world of marketing and advertising,]]></text> </main_point> <main_point time="651"> <text><![CDATA[that we are not going to accept anything but a diamond.]]></text> </main_point> <main_point time="654"> <text><![CDATA[So they have created this very big sustainable competitive advantage and it’s been there for many, many years.]]></text> </main_point> <main_point time="662"> <text><![CDATA[So until we really change our consumer mentality towards diamonds]]></text> </main_point> <main_point time="667"> <text><![CDATA[they are going to hold that sustainable competitive advantage.]]></text> </main_point> <main_point time="672"> <text><![CDATA[So today we really focused on three elements of successful companies to be aware of.]]></text> </main_point> <main_point time="677"> <text><![CDATA[And the first is: what is the company’s competitive advantage?]]></text> </main_point> <main_point time="681"> <text><![CDATA[And then what are the resources that we really have that create this competitive advantage?]]></text> </main_point> <main_point time="686"> <text><![CDATA[And finally once we know that, how can we actually take it one step further from a competitive advantage]]></text> </main_point> <main_point time="694"> <text><![CDATA[to a sustainable competitive advantage?]]></text> </main_point> <main_point time="697"> <text><![CDATA[All of these questions are important questions in us to really understanding the organizational strategy of our company,]]></text> </main_point> <main_point time="705"> <text><![CDATA[and how to get to that vision that we really want.]]></text> </main_point> <main_point time="709"> <text><![CDATA[So until we meet again, what’s your company’s competitive sustainable advantage?]]></text> </main_point> <main_point time="714"> <text><![CDATA[Better yet, how can you contribute to making it totally sustainable?]]></text> </main_point> <main_point time="719"> <text><![CDATA[Take care and see you soon.]]></text> </main_point> <main_point time="722"> <text><![CDATA[]]></text> </main_point> </points> <definitions/> <html_text><![CDATA[<p><A HREF="Event:Time_0"> Hello my name is Jean Meeks-Koch, and today we’re going to focus on: what is competitive advantage</A><A HREF="Event:Time_7"> and why is this a cornerstone to a successful organization and its organizational strategy. So let’s begin.</A><A HREF="Event:Time_17"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">In order to really describe what a sustainable competitive advantage is,</A><A HREF="Event:Time_22"> and this is the depth, the deep, the foundational piece of organizations,</A><A HREF="Event:Time_28"> we first have to understand competitive advantage and so we are going to start with some basics on it.</A><A HREF="Event:Time_34"> We are going to start with your company and first identifying what are your company’s resources.</A><A HREF="Event:Time_41"> So I have a question for you:</A><A HREF="Event:Time_42"> Can you list four top resources in your organization?</A><A HREF="Event:Time_49"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">Well I bet some of you might have said the people.</A><A HREF="Event:Time_52"> Yeah, us the people, the product or the service, what we’re selling or what we have to offer.</A><A HREF="Event:Time_59"> Or maybe even the building we happen to work in.</A><A HREF="Event:Time_63"> If you mentioned any of the above, you are absolutely correct.</A><A HREF="Event:Time_67"> These are all resources. So when we look at what are a company’s resources, we need to be able to identify them.</A><A HREF="Event:Time_73"> They are all of the assets that we have, all of the things that have value.</A><A HREF="Event:Time_78"> They are also not only assets, tangible assets that you can touch, you can see, you can feel,</A><A HREF="Event:Time_84"> there’s also intangible assets. For example, like the goodwill we have. Our name, our brand,</A><A HREF="Event:Time_91"> you can’t touch a name you can’t touch a brand. But if you look at somebody like Nike,</A><A HREF="Event:Time_97"> that has a lot of brand recognition in the market place, so the Nike brand and the swoosh, okay.</A><A HREF="Event:Time_103"> Their logo, that has lot of brand, that’s a valuable intangible asset.</A><A HREF="Event:Time_108"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">The second resource is capabilities. What are the talents that we have?</A><A HREF="Event:Time_114"> What are the capabilities that each individual has in the workplace?</A><A HREF="Event:Time_118"> What do they contribute? Their capabilities, their intellectual piece.</A><A HREF="Event:Time_123"> That’s a very valuable resource and a high price commodity right now in the marketplace.</A><A HREF="Event:Time_128"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">The third one is our processes. We all do things in a unique way in our companies.</A><A HREF="Event:Time_136"> There are certain ways we might do something that allows us to be more efficient and more effective.</A><A HREF="Event:Time_141"> These particular processes, when they are mapped out, they have a lot of value.</A><A HREF="Event:Time_146"> Because it’s the way we go about doing or producing or selling our product or service and providing it to our consumers,</A><A HREF="Event:Time_158"> our clients, that other people might not do that way. That actually is our benefit.</A><A HREF="Event:Time_163"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">The fourth is employee’s time. Time is valuable, time is precious, we only have so much time.</A><A HREF="Event:Time_169"> There’s only 24 hours in a day, there’s only seven days in a week, we can’t create more time.</A><A HREF="Event:Time_175"> So the use of employee time and how we manage it is a very valuable resource.</A><A HREF="Event:Time_182"> The next one is information. The ability to gather really good information, acquire really good data,</A><A HREF="Event:Time_189"> and then to be able to discern the information. What’s relevant to what we are trying to accomplish and what’s not,</A><A HREF="Event:Time_195"> is a very important resource and capability. So how we go about gathering information, what kind of technology do we have?</A><A HREF="Event:Time_204"> What kind of tools do we have for our information gathering that allows us to be competitive in the marketplace?</A><A HREF="Event:Time_211"> That’s a valuable resource.</A><A HREF="Event:Time_213"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">And last but most important is our knowledge.</A><A HREF="Event:Time_216"> What is our knowledge of the industry?</A><A HREF="Event:Time_219"> How knowledgeable are we are?</A><A HREF="Event:Time_220"> How often do we stay up with the change in our industry, in our marketplace?</A><A HREF="Event:Time_225"> This ability to grapple and acquire knowledge and grow from it is very powerful.</A><A HREF="Event:Time_232"> And so these are all the resources that a company controls and they are very important to know and understand and be respectful of.</A><A HREF="Event:Time_239"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So I have a multiple choice question for you.</A><A HREF="Event:Time_242"> What do you think is the most important reason a company acquires a particular resource?</A><A HREF="Event:Time_250"> Well if you said D, you’re absolutely correct A and B are accurate but again they are not the most important resource,</A><A HREF="Event:Time_258"> the most important resource is really to create this competitive advantage over our competitors.</A><A HREF="Event:Time_264"> We want to get that market share, so we have to create that competitive advantage with every resource we bring in,</A><A HREF="Event:Time_271"> and if it’s not going to do that you need to think twice about the acquisition of that asset.</A><A HREF="Event:Time_278"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So the idea with this discussion is, we were talking about this idea of competitive advantage and why is it important to a company.</A><A HREF="Event:Time_286"> So let’s go and define now that we have defined resources and why are they important, let’s define competitive advantage a little bit.</A><A HREF="Event:Time_295"> Competitive advantage provides great value for customers than what our competitors can provide.</A><A HREF="Event:Time_302"> So when a customer looks at us what we are providing they see as greater value than our competitors. That’s our competitive advantage.</A><A HREF="Event:Time_313"> So it’s the value that the customer sees. So let’s give an example: we have McDonald and we have Burger King, okay.</A><A HREF="Event:Time_320"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">Now you may like going to McDonald’s and you might like going to Burger king. Why?</A><A HREF="Event:Time_326"> What’s the competitive advantage?</A><A HREF="Event:Time_328"> Why would people value McDonald’s over Burger King or vice versa?</A><A HREF="Event:Time_334"> What is it in the eyes of that customer? What draws that customer?</A><A HREF="Event:Time_339"> That would be McDonald’s or Burger King’s competitive advantage.</A><A HREF="Event:Time_344"> So understanding that about your company becomes very important.</A><A HREF="Event:Time_349"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So as an organization, some of the things that we must decide, in order to figure out our competitive advantage,</A><A HREF="Event:Time_356"> is what business or industry are we really in?</A><A HREF="Event:Time_359"> What is that?</A><A HREF="Event:Time_360"> Where are we choosing to play?</A><A HREF="Event:Time_362"> What arena are we playing within?</A><A HREF="Event:Time_365"> And what do we really have to offer?</A><A HREF="Event:Time_367"> What are we offering to our consumers or our clients, that they see value in toward that target population?</A><A HREF="Event:Time_374"> What are we actually offering?</A><A HREF="Event:Time_377"> And then once we realize what do we have of value to offer, how are we going to go about marketing that?</A><A HREF="Event:Time_383"> What does that marketing look like?</A><A HREF="Event:Time_385"> So all together, this starts providing us a competitive advantage.</A><A HREF="Event:Time_391"> These three questions start setting the stage that sets us apart.</A><A HREF="Event:Time_396"> So our competitive advantage really helps us frame our organizational strategy.</A><A HREF="Event:Time_401"> Because without understanding our competitive advantage and why people see value in us and what is it about us that sets apart,</A><A HREF="Event:Time_408"> we can’t get to our desired future, we can’t get to the vision that we want.</A><A HREF="Event:Time_414"> We can’t accomplish that within our company.</A><A HREF="Event:Time_416"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So this now circles us all the way back to resource.</A><A HREF="Event:Time_420"> These are our assets which consist of our capabilities, processes, employee time or information or knowledge</A><A HREF="Event:Time_429"> that we really need to improve in the effectiveness and efficiency of our organization.</A><A HREF="Event:Time_435"> So by recognizing and really developing our assets we can absolutely strengthen our competitive advantage.</A><A HREF="Event:Time_442"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">Now once we have our competitive advantage dialed in, how do we make that sustainable?</A><A HREF="Event:Time_449"> Because ultimately, the companies that have a sustainable competitive advantage have a higher value in the marketplace than companies that don’t.</A><A HREF="Event:Time_460"> So what does it mean to have a sustainable competitive advantage?</A><A HREF="Event:Time_464"> So this is a competitive advantage that another company cannot easily duplicate.</A><A HREF="Event:Time_470"> It’s very difficult for them to duplicate it.</A><A HREF="Event:Time_473"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So can you think of a company that you consider might have a sustainable competitive advantage?</A><A HREF="Event:Time_480"> I can, the first one that absolutely comes to my mind is Apple.</A><A HREF="Event:Time_486"> Apple. It has an innovative mind, it has closed technology.</A><A HREF="Event:Time_490"> When it has marketed a new product, it’s taken a first mover advantage, far surpassing others in the industry.</A><A HREF="Event:Time_500"> So they really have, at this point in time, a sustainable competitive advantage.</A><A HREF="Event:Time_504"> When you look at the iPod and it was launched, look at it now, I mean nobody has come close to touching that.</A><A HREF="Event:Time_513"> Look at the iPad, same kind of energy getting created.</A><A HREF="Event:Time_517"> We have other brands trying to compete in that marketplace but this Apple. For some reason people will stand in line and wait for it to come out,</A><A HREF="Event:Time_525"> when we might have just bought one, the iPad two. And then people stand in line for the iPad three.</A><A HREF="Event:Time_532"> There’s something that’s created this sustainable competitive advantage, where everybody wants to be part of that bandwagon.</A><A HREF="Event:Time_540"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So to have a sustainable competitive advantage, your resources have to posses these four characteristics.</A><A HREF="Event:Time_549"> And these are paramount. So they have to be valuable, they have to be considered valuable, have to be considered rare,</A><A HREF="Event:Time_556"> they have to be imperfectly imitable. That’s a mouthful; imperfectly imitable meaning it’s really hard to imitate them.</A><A HREF="Event:Time_567"> And then non-substitutable, meaning your consumers, the population won’t accept something as a substitute.</A><A HREF="Event:Time_575"> So I’ll give you an example of a sustainable competitive advantage.</A><A HREF="Event:Time_580"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">I look at De Beers diamonds, they control the majority of the diamond mines and the diamond market, like it or not they do.</A><A HREF="Event:Time_590"> So why do they have a sustainable competitive advantage?</A><A HREF="Event:Time_593"> Why isn’t my cubic zirconia as important as the De Beers diamond?</A><A HREF="Event:Time_599"> Well number one, it is valuable, right? Diamonds have a value, we have a big dollar value to it.</A><A HREF="Event:Time_608"> Number two, it’s rare isn’t it? There is a rarity to it.</A><A HREF="Event:Time_613"> And number three is, it’s hard to imitate a diamond.</A><A HREF="Event:Time_616"> Now you can turn around and look at a ring and say “is that a cubic zirconia?”</A><A HREF="Event:Time_621"> or "is that a real diamond?" It might be hard to tell.</A><A HREF="Event:Time_624"> But I’ll tell you, I’m taking it from the female side here,</A><A HREF="Event:Time_628"> if you give me a cubic zirconia and you think you’re passing it off as a diamond I’m not going to be very happy with you.</A><A HREF="Event:Time_634"> Again we haven’t quite accepted the cubic zirconia as the engagement ring, have we?</A><A HREF="Event:Time_640"> You know, that’s a societal thing and so there isn’t a lot of substitutes right?</A><A HREF="Event:Time_645"> It’s really non-substitutable. They’ve created it in the world of marketing and advertising,</A><A HREF="Event:Time_651"> that we are not going to accept anything but a diamond.</A><A HREF="Event:Time_654"> So they have created this very big sustainable competitive advantage and it’s been there for many, many years.</A><A HREF="Event:Time_662"> So until we really change our consumer mentality towards diamonds</A><A HREF="Event:Time_667"> they are going to hold that sustainable competitive advantage.</A><A HREF="Event:Time_672"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So today we really focused on three elements of successful companies to be aware of.</A><A HREF="Event:Time_677"> And the first is: what is the company’s competitive advantage?</A><A HREF="Event:Time_681"> And then what are the resources that we really have that create this competitive advantage?</A><A HREF="Event:Time_686"> And finally once we know that, how can we actually take it one step further from a competitive advantage</A><A HREF="Event:Time_694"> to a sustainable competitive advantage?</A><A HREF="Event:Time_697"> All of these questions are important questions in us to really understanding the organizational strategy of our company,</A><A HREF="Event:Time_705"> and how to get to that vision that we really want.</A><A HREF="Event:Time_709"> </P><p ALIGN="LEFT"></P><p ALIGN="LEFT">So until we meet again, what’s your company’s competitive sustainable advantage?</A><A HREF="Event:Time_714"> Better yet, how can you contribute to making it totally sustainable?</A><A HREF="Event:Time_719"> Take care and see you soon.</A><A HREF="Event:Time_722"> </P></A>]]></html_text> </transcript>
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Outline: 
<outline x="0" y="0" width="0" height="0" version="1.5"> <points> <main_point godTime="0" subPoint="0" index="0"><![CDATA[<p class="title">Competitive Advantage in Organizational Strategy</p>]]></main_point> <main_point godTime="17" subPoint="0" index="1"><![CDATA[<p class="a-head">Identifying Resources</p><span class="spacing"><br /></span>]]></main_point> <main_point godTime="47" subPoint="0" index="2"><![CDATA[<span class="ll-bullet"><img src="https://aklearning.com/assets/img/slim_vs.png" width="30" height="10" vspace="0"/></span><p class="ll">Verbal Survey</p>]]></main_point> <main_point godTime="248" subPoint="0" index="3"><![CDATA[<span class="ll-bullet"><img src="https://aklearning.com/assets/img/link_icon.png" width="30" height="10" vspace="0"/></span><p class="ll">Concept Check</p>]]></main_point> <main_point godTime="442" subPoint="0" index="4"><![CDATA[<p class="a-head">Sustainable Competitive Advantage</p><span class="spacing"><br /></span>]]></main_point> <main_point godTime="479" subPoint="0" index="5"><![CDATA[<span class="ll-bullet"><img src="https://aklearning.com/assets/img/slim_vs.png" width="30" height="10" vspace="0"/></span><p class="ll">Verbal Survey</p>]]></main_point> <main_point godTime="580" subPoint="0" index="6"><![CDATA[<span class="b-bullet"><img src="https://aklearning.com/assets/img/bullet.png" width="10" height="10" vspace="3"/></span><p class="b-head">Examples of Sustainable Advantage</p>]]></main_point> <main_point godTime="581" subPoint="0" index="7"><![CDATA[<span class="ll-bullet"><img src="https://aklearning.com/assets/img/slim_wiki.png" width="30" height="10" vspace="0"/></span><p class="ll">In-depth Information</p>]]></main_point> </points> </outline>
Resources: 
<p dir="ltr"> <span style="font-size:22px;"><span style="font-family: arial, helvetica, sans-serif;">Business Insider&#39;s article on Sustainable Competitive Advantage</span></span></p> <p> <span style="font-size:22px;"><span style="font-family: arial, helvetica, sans-serif;"><a target="_blank" href="http://www.businessinsider.com/the-6-keys-to-sustainable-competitive-advantage-2010-6?op=1">http://www.businessinsider.com/the-6-keys-to-sustainable-competitive-advantage-2010-6?op=1</a></span></span></p>
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17
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Competitive Advantage in Organizational Strategy
Key words: 
organizational, strategy, competitive, advantage, resources, assets,
Short Description: 
  In this module you will learn the effect that competitive advantage has on your company and its products.
Learning Objectives: 

Learn the basic needs for competitive advantage Know the effects of competitive advantage on your company and products

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