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DR JAN ALPENBERG, PHD, ECON DRTYNDALE UNIVERSITY
TORONTO, ON
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Value creation and value proposition
Competitive Advantage
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Competitive advantage A firm’s profitability is greater than the average
profitability for all firms in its industry
Sustained competitive advantage A firm maintains competitive advantage for a number
of years
Profitability = Profit/Capital
Value Creation per Unit
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Main factors that creates value and competitive advantage:
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Superior quality (both percieved and technical)Superior innovationSuperior effeciency (internal and external)
Internal – output/input – ”to do the things right” External – output/goals – ”to do the right thing”
Superior customer responsiveness (leadtime, satisfaction, loyalty, unique products)
To offer the customer what they want, when they want it, in the right quantity, to the right quality, to the right price)
Value proposition
Jan Alpenberg, Youth Unlimited, Blueprint 2012
How is your company going to create value for the customer?
What are the components/attributes that creates the value?
List your components… What are the things the customer is buying? What do the customer get when they buy the product?
Functions? Benefits? Savings? What is the deal?
Value Creation and Pricing Options
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Comparing Toyota and General Motors
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Differentiation and Cost Structure: Roots of Competitive Advantage
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Distinctive Competences and Competitive Advantage
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Distinctive competencies Firm-specific strengths that allow a company to gain
competitive advantage by differentiating its products and/or achieving lower costs than its rivals
Arise from resources and capabilities
The Role of Resources
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Resources Capital or financial, physical, social or human,
technological, and organizational factor endowments Tangible and intangible
A firm-specific and difficult to imitate resource is likely to lead to distinctive competency
A valuable resource that creates strong demand for a firm’s products may lead to distinctive competency
The Role of Capabilities
Jan Alpenberg, Youth Unlimited, Blueprint 2012
Capabilities A company’s skills at coordinating and using its
resources
Capabilities are the product of organizational structure, processes, and control systems