Competitiveness 1.
Cost
*as of Dec. 31, 2018, there are 1,005,135
registered businesses through SEC nationwide
Competitive Advantage – are conditions that
allow a business to produce a good or service
of equal value at a lower price or in a more
desirable fashion.
6 Sources of Competitive Advantage:
1. People
>People are the driving force behind any
company
2. Organizational culture & structure
> Organization culture is the shared beliefs,
habits, behaviors, mission, norms, and symbols
of an organization
> A good workforce with no common vision &
mission will only succeed in failing.
> An effective culture focuses the energies &
abilities of the people on producing
meaningful results
3. Processes & Practices
> Superior methods of producing products
can be difficult to replicate
4. Products & intellectual Property
> product designs are a large part of some
firms’ uniqueness & competitive advantage
> Intellectual property is guarded by R.A. 8293
(Intellectual Property code)
5. Capital & Natural resources
> Traditionally the source of most competitive
advantage
6. Technology
> A major factor that rose as a source of
competitive advantage with the industrial
revolution
> includes industrial machinery,
transportation, energy efficiency, information
technology, biotechnology, etc.
Competitive Priorities: to gain competitive
advantage in a competitive market, a
company might have to ask oneself how to
compete
> offering a product at a low price relative to
competition
> typically involves high-volume products
> Often limit product range
> firms may invest in automation to reduce
unit costs
> a business may rely on using lower-skill labor
* lower cost may not necessarily mean low
quality
2. Quality
> quality is often subjective
> 2 dimensions of Quality:
a.) High-performance design – boasting
top performances
b.) Product & service consistency –
boasting consistency as well longevity
> Quality usually addresses a company’s:
a.) Product design quality – a product
design must meet consumer requirements
b.) Process quality – related to Total Quality
Management
3. Time
> First that can deliver is often who that wins
the race
> Time addresses the following issues:
a.) Rapid Delivery – shorter time between
order placement & delivery
b.) On-time Delivery – be able to deliver
products exactly when needed
4. Flexibility
> Company must be able to accommodate
change by being flexible
> addresses the following:
a.) Product flexibility – easily switch
production from one product to another;
being able to customize products according
to the consumer’s needs
b.) Volume flexibility – Ability to ramp
production up and down depending on
market demands