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August 2009
Densil A. Williams Department of Management Studies
UWI, Mona
Enhancing Enterprise
Competitiveness through Strategy
and Efficiency
Jamaica Computer Society Conference, April 15-16, 2011, UWI, Mona.
Contents
Firm Level Competitiveness
What does it really mean?
Common Competitiveness Drivers in Caribbean Firms
Generic Competitive Strategies
Where should Caribbean Firms be Located?
Risk involved in pursing Generic Strategies
Operational Efficiency and Competitiveness
Concluding Thoughts
Know the Industry Structure
Firm Level Competitiveness: What does it really mean?
Competitiveness at the national level is seen as a non zero-sum game.
All nations can achieve competitiveness if viewed through the lens
of improved productivity, not competition
Is this true at the firm level?
Firm Level Competitiveness: What does it really mean?
Enterprise competitiveness is multifaceted
Ability to export to an array of countries without preferential treatment
Ability to engage in FDI using local talents and skills
Ability to operate at international standards
Ability to earn above average return while competing with indigenous enterprises in the free market
Common Competitiveness Drivers in Caribbean Firms
Effective Risk Management (BNSJ, First Life)
Highly focused activities
Diversification to offset threats
Work Place Transformation and Upgrade HR (Jamaica Broilers)
Up-skill employees
Requisite training
Benchmark against international competition (Former Superplus group)
Broader world view
Good knowledge of the industry
Common Competitiveness Drivers in Caribbean Firms
Focus on Innovation, Marketing, Technology an Quality (Sandals, Superclubs)
Marketing was critical for Courts in its turn-around
LASCO innovative in its soy-based drink
ISO certification, mark of quality (Wray & Nephew)
Corporate Leadership (Grace Kennedy)
Central to drive change in the organization
Generic Competitive Strategies: Where should Caribbean Firms be Located?
Porter identified three (3):
Cost leadership
Differentiation
Focus
Differentiation
Cost Leadership
Generic Competitive Strategies: Where should Caribbean Firms be Located?
LOW COST DIFFERENTIATION
(Uniqueness)
Broad (Industry
Wide)
Cost Leadership Differentiation
Narrow (Particular
Segment)
Cost Focus Focused Differentiation
S
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Strategic Advantage
Generic Competitive Strategies: Where should Caribbean Firms be Located?
Risks from going Generic
Sustaining the Strategy
Technological changes nullify past investment and learning
Imitation narrows perceived differentiation
Erosion of strategic value due to industry evolution
Removal of defenses against competitors
How do you guard against these risks?
Operational Efficiency and Competitiveness
Efficiency and Innovation are important to maintain competitive advantage
Efficiency helps to create greater value, lead to lower cost and higher quality output
All areas of the value chain must be operated efficiently in order to maintain competitiveness
Operational Efficiency and Competitiveness
Source: Adopted from Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York : The Free Press
Operational Efficiency and Competitiveness
Attaining Operational Efficiency
Look at your current situation
How does my work processes match up with the industry standards?
Optimize business processes
Remove bottlenecks that reduce time to market products (Think BPR!!!!!!)
Operational Efficiency and Competitiveness
Upgrade assets to current industry standards
Helps to cut operational costs
Modernize business thinking
Try to be lean and focus on sharing production capabilities
Create new opportunities from outsourcing (Digicel with the top-up services to the corner shopman))
Operational Efficiency and Competitiveness
Dynamic efficiency is also critical
Quick and effective response to new developments in the industry
Each enterprise must address their own unique operational challenges
Concluding Thoughts
Enterprise competitiveness will require a mix of efficiency and good strategy
Each firm must understand the industry structure in which it
operates.
Porter’s five forces model Bargaining power of suppliers
Bargaining power of buyers
Threat of substitute products Threat of new entrants
Rivalry among competing firms