Building Competitive Advantage Through

Functional- Level Strategy

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

11.08.2014

Learning Objectives
Explain how an enterprise can use functional level strategies to
increase its:

Efficiency
Quality
Innovation

Customer responsiveness
11.08.2014
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

Functional Level Strategies

Improving

Effectiveness
Operations

11.08.2014
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

Ch.4 Overview
Improving

Effectiveness

Functional Level
Strategies

Achieving
Superior

Efficiency
Quality
Operations
innovation

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

Customers
responsiveness

11.08.2014

Chapter

4: Overview

Distinctive Competencies

Functional strategies

Superior

Efficiency

Quality

Innovation

Differentiation

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

Customer responsiveness

Low Cost

Value
Creation

Superior
Profitability
11.08.2014

Achieving Superior Efficiency

Labour
Land
Input

Capital
Management

Efficiency

Know how
Goods
Output
Services

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

11.08.2014

Superior Efficiency

Achieving Superior Efficiency

Economics of Scale

prices
volume

Learning Effects

learning by doing

Experience Curve

cost structure

Flexible Systems/mass
customization
Marketing

Mass production

Marketing strategies
11.08.2014

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

Material Management (JIT) Efficiency

Hiring Strategy
R&D Strategy
Employee Training
HR Strategy
Self-Managing Team

Material Management (JIT)

IT

Pay for performance

Infrastructure
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

11.08.2014

Achieving Superior Quality

Quality as Reliability
Superior Quality

Quality as Excellence
Allows for differentiation

premium price

Advantages
Eliminate defeats

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

efficiency

11.08.2014

Superior Quality
Six Sigma
Attaining Superior Reliability

Form

TQM
Superior Quality

Implementing Reliability
Quality as Excellence

Cooperation all functions

Differentiation

Features

Performance
Durability
Reliability
Style

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

11.08.2014

10

Achieving Superior Innovation

Competitive advantage

1. Differentiated
products

Premium price

2. Lower
structure

cost

cost

1.Uncertainty (Demand)
2. poorly commercialised

Superior Innovations

Failure Rate of Innovation

3.Poor positioning
4.Marketing Failure

5.Slow cycle time

Innovation Failure
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

Customer needs/manufacturing/timing/reengineering
11.08.2014

11

Achieving Superior Customer Responsiveness

Leadership

Want
Focus on Customer

Employees
attitude

When
Price

Bring customers
into the company

Customer Responsiveness
Customization
Satisfying customer Needs
Response time
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy

11.08.2014

12