COMPETITION & STRATEGY
Dr. Karthika S
Asst. Professor IIM Vizag
Ph.D. IIM Bangalore
PGP IIM Trichy
40 CLASS RULES
Read cases and additional readings before class. Also go through the
textbook for theory.
Class slides will be shared periodically. But do not depend solely on them.
Display your nameboards and try to sit in the same place for all of my
classes.
Feel free to email any doubts or class inputs to [email protected]
Elect a SR. (S)he will be in charge of keeping the class on schedule.
No cellphones/laptops in class.
No walking in and out during class.
IIM V | PGP C&S | Prof. Karthika S
41 COURSE OUTLINE
Refer course binder for detailed instructions
Evaluation Component Type Weightage
Class Participation Individual 10%
Quizzes (4) Individual 20%
Mid Term Individual 20%
End Term Individual 20%
Group Project &
Group 30%
Presentation
IIM V | PGP C&S | Prof. Karthika S
42 QUIZZES
MCQs
Online
Dates will be announced end of this week
Quiz Tentative dates
Quiz 1 8th November
Quiz 2 3rd November
Quiz 3 29th November
Quiz 4 15th December
IIM V | PGP C&S | Prof. Karthika S
Deadline
No. Submissions (by 10
pm)
43
1 Project firm selection. 15th Oct
Submit two choices of firms along with their industries. The project firm will
PROJECT 2
be allocated on a first-come first-served basis.
Industry analysis and business strategy of the firm (docx file) 10th Nov
GUIDELINES The word limit for the report is 2 pages. Your report should contain:
• The definition of the industry, including industry boundaries.
• Assessment of industry attractiveness and the changes over time
• Resource analysis of the firm and sources of competitive advantage
(All submissions will along with how sustainable the advantage is.
be through Moodle 3 Corporate strategy and strategic processes of the firm (docx file) 16th Dec
and run through The word limit for the report is 2 pages. Your report should contain:
• The various corporate strategies applied by the firm in the past.
plagiarism check) Comment on which of these were successful and why.
• The strategic processes of the firm like planning, implementation,
knowledge management, and corporate governance.
4 Overall project presentation (pptx file) 17th Dec
Each group will have 10 minutes to present its firm analysis. I will provide
feedback based on the presentation.
5 Final project report (docx file) 23rd Dec
The word limit for the report is 5 pages. This report is a compilation of all the
submissions for the project along with any changes that you make based
IIM V | PGP C&S | Prof. Karthika S on your project feedback.
44 SESSION 5
Module 1 recap:
Strategy is the overall plan to deploy resources
To achieve a favourable position (competitive advantage)
In the long-term (sustain the competitive advantage)
Porter’s helps to identify industry players and their importance
RBV helps identify and evaluate resources
We should use RBV + Porters to achieve and sustain competitive advantage
Cost leadership
Indigo Airlines
IIM V | PGP C&S | Prof. Karthika S
45 Porter’s generic strategies
SOURCE OF COMPETITIVE ADVANTAGE
Low-cost Differentiation
Industry
wide
Cost leadership Differentiation
COMPETITIVE
SCOPE
Focus
Single
segment
IIM V | PGP C&S | Prof. Karthika S
46 Sources of cost advantage
Economies of scale Capacity utilization
Technical input-output Input costs
relationships
Locational differences in input
Indivisibilities prices
Specialization Ownership of low-cost sources of
supply
Economies of learning –
experience curve Non-union labour
Process technology and design Bargaining power
Product design Residual efficiency
IIM V | PGP C&S | Prof. Karthika S
47 Keep in mind
Cost leadership does not mean cheap products and/or low margins.
Competitive scope and advantage comes from Porter’s 5, RBV, and PESTEL
Cost leadership comes from
Efficiencies in the entire value chain
Ability to keep up with industry/competitive shifts
Strategic groups allow firms to adopt different strategies to deliver the same
product/service.
IIM V | PGP C&S | Prof. Karthika S
48 SESSION 6
Differentiation advantage
Supply side
Demand side
Sony
IIM V | PGP C&S | Prof. Karthika S
49 Differentiation advantage
Provides something unique that is valuable beyond simply offering a lower
price
Potential for differentiation – technical complexity, complex needs, non-
standard products.
Differentiation is more sustainable than cost advantage.
Quality, branding, and innovation are some bases.
IIM V | PGP C&S | Prof. Karthika S
50 Differentiation potential
DEMAND SIDE SUPPLY SIDE
Key customer needs satisfied Product integrity
Criteria which customers use to select Signaling and reputation
Price premiums for product attributes Brands as guarantees
Demographic, sociological, and Costs versus benefits
psychological influences
IIM V | PGP C&S | Prof. Karthika S
51
IIM V | PGP C&S | Prof. Karthika S
52 Keep in mind
Differentiation (how a firm competes) is different from segmentation (where
a firm competes – customers, geographies, product types)
Customer value should be documented, substantiated, and
communicated
Points of parity are not as important as points of difference
IIM V | PGP C&S | Prof. Karthika S
53 SESSION 7
Cost leadership and differentiation
Ambidexterity / Integrated strategies
Teva Pharma
IIM V | PGP C&S | Prof. Karthika S
54 ANNOUNCEMENTS
Quiz 2 on November 3rd
Quiz 1 retake on November 8th
Quiz duration – 20 mins
First submission for project – November 10th
Submission through Turnitin
Plagiarism will result in a zero grade for the entire project component
IIM V | PGP C&S | Prof. Karthika S
55 Ambidextrous organization
Different alignments held together through senior-team integration,
common vision and values, and common senior team rewards
ALIGNMENT OF COST FOCUS DIFFERENTIATION FOCUS
Strategic intent Cost, profit Innovation, growth
Critical tasks Operations, efficiency, Adaptability, new products,
incremental innovation breakthrough innovation
Competencies Operational Entrepreneurial
Structure Formal, mechanistic Adaptive, loose
Controls, rewards Margins, productivity Milestones, growth
Culture Efficiency, low risk, Risk-taking, speed, flexibility,
quality, customers experimentation
Leadership role Authoritative, top-down Visionary, involved
IIM V | PGP C&S | Prof. Karthika S
Org structures
56 CROSS -FUNCTIONAL
FUNCTIONAL UNSUPPORTED
AMBIDEXTEROUS
IIM V | PGP C&S | Prof. Karthika S
57 SESSION 8
Platform Business Models
Introduction, use, and terminology
Google Inc in 2014
IIM V | PGP C&S | Prof. Karthika S
58 PLATFORM BUSINESS MODELS
Platforms – brings together multiple groups of users
Network effects – the effect of one group of users on another
Same-side and cross-side network effects
Positive and negative network effects
IIM V | PGP C&S | Prof. Karthika S
59 MONETIZATION
Money side and subsidy side – depends on
User sensitivity to price and quality
Ability to capture cross-side network effects
Output costs
Strength and sign of same side network effects
Marquee users
IIM V | PGP C&S | Prof. Karthika S
60 DYNAMICS
Winner-take-all – market can support only one major standard
Multi-homing costs are high
High positive same-side and cross-side network effects
No user group has strong preferences for special features
Can have first-mover or late-mover advantages
Envelopment – from overlapping user groups
Can result from bundling
Leads to blurring of market boundaries - convergence
IIM V | PGP C&S | Prof. Karthika S
