Core Competencies and Competitive Advantage for Eco Entrepreneurship

• We have focused on the external factors affecting competitive advantage—1) identifying the relevant market; 2) analyzing competitors; 3) examining other external factors—macro economic, social, tax/regulatory, etc; 4) identifying the target market as precisely as possible.

• We now turn to internal factors affecting competitive advantage.– Resources capabilities core

competencies competitive advantage

Core Competencies and Competitive Advantage for Eco Entrepreneurship

• Resources: tangible and intangible inputs into the firm’s production: labor, capital, location (tangible); trust, managerial capabilities, links to market, scientific capabilities, synergies, reputation, brand (intangible).•We want to identify those resources that are:

–Valuable (to the market)–Rare (not held by competitors)–Costly to imitate (difficult for competitors to copy)–Non substitutable (required)

•These resources then become capabilities that are core competencies contributing to a competitive advantage.

Core Competencies and Competitive Advantage for Eco Entrepreneurship

• Intangible resources are the most likely to be capabilities. Why?

• Challenge is to identify the resources that the venture needs to launch and produce goods or services and then to further identify those that are core capabilities.

• How can you do this?– First must decide if they are valuable to the firm and the

consumer.– Value chain analysis for the firm and for the target market.– Map the value added in each segment of production with

potential value to the client.– Which resources are required?

Core Competencies and Competitive Advantage for Eco Entrepreneurship

– Then decide if the resources are rare (competitors do not have them)

– If they are difficult to duplicate– If they are non substitutable– Then the value chain identification of key resources

has directed you to those that are core competencies.

Core Competencies and Competitive Advantage for Eco Entrepreneurship: Value Chain for Green Sun

• Inbound logistics (top quality)– Locate and order panels, installers

– Locate financiers and tax credits, lease financing

• Operations (stable prices, lower bills)– PPA implemented, roof leased, panels installed

– Electricity generated and sold to customer

– Developer fee

• Outbound logistics (turnkey operations, no management issues)– Ship and install panels, project manager

• Marketing and Sales (Green PR)– Locate customers, relationship driven, continuous market research

• Service (insure reliability for 15 years)– Panels, generator

Core Competencies and Competitive Advantage for Eco Entrepreneurship

• Examine Green Sun Business Plan to see how that group addressed these issues.

• Monday, March 3—Teams to present their core competencies and value chain analyses.