Alberts PDF

Gaining and Sustaining a Competitive Advantage in an
Optometric Practice
by
Nicolaas Francois Alberts
A Short Dissertation Submitted
as
Partial Fulfilment
as
Required of the Degree Master of Commerci
ill
Business Management
ill
The Faculty of Economic and Management Sciences
at
The Rand Afrikaans University
under
Study Leadership of TFJ Oosthuizen
October 2002
Johannesburg
SYNOPSIS
Kotler (1997:53) defines competitive advantage as " ... a company's ability to perform
in one or more ways that competitors cannot or will not match". Companies strive to
build sustainable competitive advantages. Those that succeed deliver high customer
value and satisfaction, which lead to high repeat purchases and therefore high
company profitability. Competitive positioning is important and crucial in the rapid
changing environment wherein organisations find themselves. Differentiation of
service or product is ofutmost importance to satisfy current clientele and to draw new
business. Any organisation unable to differentiate to offer something unique finds
itself part of a vast majority of "middle-of-the-road" organisations on the road to
nowhere, even if general quality of service and product is acceptable.
The study is aimed at developing a model by which a competitive advantage can be

gained and sustained in an optometric practice. Different ways of gaining and
sustaining competitive advantage is explored through current literature review in
order to establish and develop the suggested model. Quantitative research was done in
the greater Gauteng region by means of a mail survey to a random sample of
optometrists. Two hundred and fifty questionnaires were sent out with a 19,2%
response rate.
The highest conformity amongst respondents is given to the Employee dimension

with the least conformity given towards the Market dimension. Respondents thus
value the Employee dimension as the most important factor in gaining competitive
advantage. It is suggested that Porter's Value Chain be altered to have Human
Resource Management forming the foundation of the value adding activities. Human
Resource Management thus plays the most important role in adding value as it is
utilised as medium through which value is passed on to clients. This view is in
contrast with Porter's where Human Resource Management only served as a
supporting function.
ACKNOWLEDGEMENTS
I wish to express my gratitude towards the Lord for His blessing and guidance without
which this dissertation would not have been possible. I would like to thank my parents
for their love and support in all aspects of my life. You have nurtured my potential
and unleashed my true capabilities. Annelene, Kobus and Chrisna have always
believed in me and have played an important role in forming my character - thank
you very much. To my loving wife and sole mate, Louisa, I would like to express my
most sincere gratitude for her true love and unfaltering support in my efforts to
complete my studies. You are a true friend and comrade without which I would not be
complete.
I would also like to thank my study leader, Theuns Oosthuizen for his extended
guidance with my dissertation.
TABLE OF CONTENTS
CHAPTERI-INTRODUCTION
page 1
1.1
Background
1.2
Problem Statement
1.3
Objectives of Study
1.4
Research Methodology
1.5
Demarcation of Study
1.6
Summary
1.7
Chapter Outline
10
CHAPTER 2 - COMPETITIVE ADVANTAGE DYNAMICS
11
2.1
Introduction
11
2.2
Competitive Advantage Defined
12
2.3
2.2.1
Low-Cost Provider Strategies
16
2.2.2
Differentiation Strategies
18
2.2.3
Best-Cost Provider Strategy
19
2.2.4
The Value Chain
20
2.2.5
Business Strategies
22
2.2.5.1 Intensive Growth
23
2.2.5.2 Integrative Growth
23
2.2.5.3 Diversification Growth
24
Sustainability of Competitive Advantage
24
2.3.1
Sustainability of Cost Leadership
25
2.3.2
Sustainability of Differentiation
26
2.3.3
Sustainability of a Focus Strategy
27
2.4
2.3.4 Creating Competitive Advantage through

Service
28
2.3.5 Competitive Advantage through People
33
2.3.6 The Learning Organisation
37
Strategies for Defending the Competitive Advantage
38
2.4.1 Raising structural barriers
38
2.4.1.1 Fill product or positioning gaps
39
2.4.1.2 Block channel access
39
2.4.1.3 Raise buyer switching costs
39
2.4.1.4 Defensively increase scale economies
40
2.4.1.5 Form coalitions to raise barriers
40
2.4.2 Increasing expected retaliation
40
2.4.2.1 Signal commitment to defend
40
2.4.2.2 Signal incipient barriers
41
2.4.2.2 Match guarantees
41
2.4.2.4 Establish defensive coalitions
41
2.4.3 Lowering the inducement for attack
42
2.4.3.1 Reducing profit targets
42
2.4.3.2 Managing competitor assumptions
42
2.5
Pitfalls in Defence
43
2.6
Competitive Advantage through Customer Focus
43
2.6.1 Organisation Culture and Competitive

Advantage
44
2.7
The Changing Basis of Competitive Advantage
46
2.8
Conclusion
47
CHAPTER 3 - RESEARCH METHODOLOGY
49
3.1
Introduction
49
3.2
Research objectives
49
3.3
Sample size
49
3.4
Research design
50
3.5
Survey method
50
3.6
Questionnaire
53
3.7
Question Groups
53
3.7.1 Product and Service
55
3.7.2. Market
57
3.7.3. Technology
58
3.7.4. Employees
59
3.8
Coding ofthe questionnaire
60
3.9
Conclusion
61
CHAPTER4-RESULTSOFSTUDY
63
4.1
Introduction
63
4.2
Survey response
63
4.3
Demographic profile
63
4.4
Questionnaire frequencies
68
4.4.1
Product and Service
69
4.4.2
Market
73
4.4.3
Technology
75
4.4.4 Employee
77
4.5
Reliability analysis
79
4.6
Normal distribution
79
4.7
Inter-group differences
4.7.1
4.4
Product and Service
80
81
4.7.2 Dimension Frequencies
82
Conclusion
82
CHAPTER 5 - CONCLUSION AND RECOMMENDATIONS
83
5.1
Introduction
83
5.2
Conclusion
83
5.3
Recommendations
87
LIST OF REFERENCES
90
APPENDIX A - QUESTIONNAIRE
93
APPENDIX B - TECHNIQUES FOR ASSESSING COMPETITIVE 106
ADVANTAGE
APPENDIX C - FREQUENCY DISTRIBUTIONS
107
APPENDIX D - RELIABILITY ANALYSIS
115
LIST OF FIGURES
page 3
Figure 1.1
Porter's Generic Competitive Strategies
Figure 1.2
Competitive Advantage Through
Human Resource Management
The Five Competitive Forces That Determine
Industry Competition
14
Figure 2.2
The Value Chain
21
Figure 2.3
The Service Triangle
30
Figure 4.1
Nature of practice.
63
Figure 4.2
Number of optometrists employed in the practice/so
64
Figure 4.3
Number of practices owned.
64
Figure 4.4
Number of complete years practice/s exist.
65
Figure 4.5
Number of complete years optometrist has
been practising.
65
Number of complete years as owner or shareholder
of an optometric practise.
66
Figure 4.7
Positioning of current practice/so
66
Figure 4.8
Approximate size of current client base.
67
Figure 4.9
Age of respondents in complete years.
67
Figure 4.10
Gender of respondents.
68
Figure 4.11
Product and Service - Individual Question Frequencies 69
Figure 4.12
Product and Service - Grouped Frequencies
69
Figure 4.13
Market - Individual Question Frequencies
72
Figure 4.14
Market - Grouped Frequencies
73
Figure 4.15
Technology - Individual Question Frequencies
75
Figure 4.16
Technology - Grouped Frequencies
75
Figure 2.1
Figure 4.6
LIST OF FIGURES
page 3
Figure 1.1
Figure 1.2
Competitive Advantage Through
Human Resource Management
The Five Competitive Forces That Determine
Industry Competition
14
Figure 2.2
The Value Chain
21
Figure 2.3
30
Figure 4.1
Nature of practice.
63
Figure 4.2
64
Figure 4.3
Num ber of practices owned.
64
Figure 4.4
65
Figure 4.5
Number of complete years optometrist has
been practising.
65
Number of complete years as owner or shareholder
of an optometric practise.
66
Figure 4.7
66
Figure 4.8
67
Figure 4.9
67
Figure 4.10
68
Figure 4.11
Product and Service - Individual Question Frequencies 69
Figure 4.12
69
Figure 4.13
72
Figure 4.14
73
Figure 4.15
75
Figure 4.16
75
Figure 2.1
Figure 4.6
LIST OF TABLES
page 23
Table 2.1
The Major Classes of Growth Opportunities
Table 2.2
Risk of the Generic Strategies
25
Table 3.1
Advantages and Disadvantages of Different
Survey Methods
25
Table 4.1
Reliability Analysis
79
Table 4.2
Normal Distribution Analysis
80
TableBl
Techniques for Assessing Competitive Advantage
106
Table C1
Please indicate the nature of your practice/so
107
Table C2
How many optometrists are employed in
your practice/s?
107
Table C3
How many practice/s do you own?
108
Table C4
How many complete years does your practice/s exist?
108
Table C5
How many complete years have you been
practising as an optometrist?
108
How many complete years have you been the owner
or shareholder of an optometric practise?
109
How would you classify the area your current
practice(s) is situated in?
109
What is the approximate size of your current
client base?
109
Table C9
What is your age in complete years?
110
Table C10
What is your gender?
110
Table C11
Section B Frequencies
111
Table C12
Section C Frequencies
113
Table D1
Normal Distribution - One-Sample
Kolmogorov-Smirnov Test
115
Table D2.1
Group Statistics - Question 2
116
Table D2.2
Independent Samples Test - Question 2
116
Table C6
Table C7
Table C8
Table D3.1
117
Table D3.2
117
Table D4.1
118
Table D4.2
118
Table D5.1
119
Table 5.2
119
Table D6.1
120
Table D6.2
120
Table D7.1
121
Table D7.2
121
Table D8.1
122
Table D8.2
122
Table D9.1
123
Table D9.2
123
Table DI0.1 Group Statistics - Question 10
124
Table DI0.2 Independent Samples Test - Question 10
124
TableDll
125
Factor Frequencies
CHAPTER 1
INTRODUCTION
1.1
Background
Similar to other professional services, optometry can not be classified as a true service
only. It also offers a product range in the form of spectacles, sunglasses, contact lenses
and/or relative accessories. The whole chain of service and product delivery classically
involves multiple interactions between client, staff and optometrists. Collier (1994:5)
calls these interactions "moments of truth" in which the company must create and
establish the milieu of ultimate customer care. Each and every staff member needs to see
the successful creation of truth moments as his/her personal goal in order to achieve
success. Because of this complexity, competitive advantage is an elusive concept that
much need to be grasped and implemented in order to ensure survival in the ever
changing environment.
Various academic institutions in South Africa offer courses (mostly diplomas) in

optometry with the Rand Afrikaans University (RAU) the only exception offering a
Bachelor degree in optometry (B.Optom). The industry in optometry has also developed
from a closed window business, where regulations prohibited open windows to the
public, into a highly marketable and open window industry where advertising and
displaying is the industry norm. This sudden change in the marketplace has almost taken
the optometric industry by surprise. Many of the older and established groups are headed
by optometrists from the "closed-window" era, who struggle to adapt their thinking to the
high!y competitive environment prevailing currently.
Global competition is getting tougher daily and companies are increasingly looking at
ways of gaining competitive advantage in their areas of operation. Optometry is no
exception in this regard. Recent times have seen franchising and joint venturing in
loptometry where previously most practices were one-man operations or partnerships.

This added a new dimension to the competitiveness in the industry with factors like
economy of scale and brand awareness becoming more relevant.
Virtually every aspect of the business environment is experiencing accelerating change,

particularly globalisation of markets. Optometry in South Africa has yet to experience the
globalisation of highly successful optometric groups from other parts of the world. The
increasingly turbulent environment places a severe penalty on complacent management,
as knowledge of all types is subject to rapid obsolescence and erosion. Surprising enough
business success has also shown to reinforce complacency (Naumann, 1995:5). Naumann
(1995:5) attributes this to the fact that things making companies successful during certain
periods are reinforced continuously without keeping track of the changes in the
environment and demand. He also states that it is specifically people at Chief Executive
Officer (CEO) level that seize to make short term changes to company culture. Surviving
companies in the global markets are those who were better able to change and adapt to
their environment and customer demands.
Kotler (1997:53) defines competitive advantage as " ... a company's ability to perform in
one or more ways that competitors cannot or will not match". Companies strive to build
sustainable competitive advantages. Those that succeed deliver high customer value and
satisfaction, which leads to high repeat purchases and therefore high company
profitability.
Micheal Porter was one of the first contemporary scholars to apply traditional economic
thinking to management problems. Porter (1985:35, 1990:58) explains corporate strategy
in terms of a competitive marketplace. He identifies four generic strategies (1) cost
leadership; (2) differentiation (3) cost focus and (4) focused differentiation (see Figure
1.1). The matrix suggests that competitive advantage can be gained through lower cost
and differentiation to provide unique and superior value to customers in terms of product
quality, special features, of after sale service.
Figure 1.1
Competitive advantage
Lower Cost
Differentiation
Cost Leadership
Differentiation
Cost focus
Focused differentiation
c.
0
<:J
"-'
Broad target
>
....
.........
.....
~
c.
Narrow target
(Source: Porter, 1985:35)
Porter is unique in concluding that the best analytical focus for explaining economic
performance is neither the individual firm nor macro-economic forces. Porter (1990:58)
proposes that the explanation about performance is found in studying why nations
succeed in particular industries. Much can thus be learnt from specific nations in certain
industries for example productivity in Japanese industries.
Kleiman (1997:27) states that to succeed, an organisation must gain and maintain an edge
over its competitors - that is, a firm must develop a competitive advantage or superior
market place position relative to its competition. Firms can accomplish this aim through
either leadership or product differentiation. Under a cost leadership strategy, a firm
provides the same services of product as its competitors, but produces them at a lower
cost. By doing so, the organisation earns a better return on its investment in capital and
human resources.
According to Kleiman (1997:28) product differentiation occurs when a firm produces a

product or service that is preferred by buyers. A firm can accomplish this aim by:
Creating a better quality product or service than its competitors
Providing innovative products or services that are not offered by its competitors
Choosing a superior location - one that is more accessible to its customers
growing body of research-based evidence indicates that a firm's Human Resource

Management (HRM) practices can have a rather strong impact on competitive advantage
(Kleiman, 1997:27). Stanford professor Jeffry Pfeffer in his book Competitive Advantage
Through People (1994:56) has described the potential impact of HRM practices on
competitive advantage. Pfeffer identified 16 HRM practices that, in his opinion, can
enhance a firm's competitive advantage (see figure 1.2).
Figure 1.2
Competitive Advantage Through Human Resource Management
HR Practices
Employee-Centered OrganisationCentered Outcomes

Outcomes
Competitive
Advantage
Pre-Selection Practices
HR planning (3)
lob analysis (4)
Selection Practices
Recruitment (5)
Selection (6)
Post-Selection Practices
Training/development (7)
Performance appraisal (8)
Compensation (9)
Productivity improvement
programs (10)
Output
Retention
Legal
compliance
Company
image
Competence
Motivation
Word-related
Attitudes
Practices Affected by
External Factors
Workplace justice (11)
Unions (12)
Safety and health (13)
International (14)
(Source: Pfeffer, 1994:56)
Cost leadership
Product
Differentiation
Pfeffer states that in some instances, firms can achieve cost leadership through the use of
effective HRM practices. HRM-related costs associated with recruitment, selection,
training, compensation, and so forth comprise a significant portion of a firm's
expenditures. These costs are especially high in service-related industries where firms
spend about 70 percent of their budgets on payroll costs alone. Those doing the best job
of containing them, therefore, stand to gain a financial advantage over their competitors.
It is also possible to trace some indirect influences of HRM practices on competitive
advantage, like the link between employee-centered outcomes and organisation-centered

outcomes (see Figure 1.2). Although the evidence just presented shows that effective
HRM practices can strongly enhance a firm's competitive advantage and the reason why
these practices have such an influence will be explored in the preceding study.
Stock and Lambert (1992: 29-30) argues that, logistics can be a source of competitive
advantage for a firm just like a good product, promotion, and pricing strategy.
Distribution can be used as the primary reason why the target market will purchase, and
distribution can be designed as a unique offering not duplicated by competition. In an era
of shrinking product life cycles, proliferating product lines, shifting distribution chains
and changing technology, mastery of logistics has become an essential ingredient of
competitive success. Companies that view logistics as an offensive marketing weapon
will likely make logistics an integral part of their competitive strategy.
Organising the business environment can playa vital role as a competitive advantage tool
(Georgiades and Macdonell, 1998: 30, Duro, 1989:22). The traditional approach used by
employers to control the output of their workers was to provide a hierarchy of decision
making. Georgiades and Macdonell summarise the effects undermining the creation of
competitive advantage as follows:
it undermines employee confidence,
it prevents spontaneous decisions (although they are sometimes necessary for

customer responses),
it removes decisions that affect productivity and quality from the workplace
(often preventing all the facts from being known by the person making the
decision),
and it can build in unnecessary numbers of managers to prop up the hierarchy.
According to Ghemawat (1991:29-36), sustainable advantage can be divided into three

categories: (1) size in the targeted market, (2) superior access to resources or customers,
and (3) restrictions on competitors' options. These advantages are non-exclusive and can
often interact.
Taking the literature overview into perspective it is clear that competitive advantage is a
complex subject encompassing diverse issues ranging from time to leadership as a
competitive tool. The development of a competitive strategy is vital to the survival and
prospering of any organisation wishing to play any significant role in it's relevant
industry. The topic is very relevant and applicable to any organisation. Without a
practical competitive strategy the organisation is like a ship without a rudder - on a
journey to nowhere.
1.2
Problem Statement
Gaining competitive advantage in the business environment and global market place has
become increasingly difficult as low cost leadership is easily copied. Even quality of
products gets copied at lower cost, leading to relatively lower value of the original
product quality. As Porter (1985:35) indicates in his model, a position of advantage can
be attained through either low cost or differentiation. At any given stage though, there
can only be one industry leader as far as low cost is concerned. If not technologically
superior to competitor, this leader can also be easily copied and sustained advantage is
therefor virtually impossible. Even technology can be copied rendering the advantage of
the cost leaders obsolete. Low cost strategies also largely targets a segment of the market
that can be called the "bargain hunters" which has low loyalty levels and will purchase
from the lowest seller at any given stage. These consumers also seek quality even at the
low price.
According to Porter's competitive matrix, differentiation seems to be the only other

alternative, especially companies focusing on broad market (see Figure 1.1). In the
optometric industry in South Africa most products available for sale are standard in that it
consists of lenses and frames purchased from wholesalers. Availability of most products
is thus not limited to certain individuals or groups, generally speaking.
Financially
strong groups purchase frames directly from overseas and establish wholesale lens
companies within their environment. Taking all of this into account, the supply of goods
is relatively equal with little differences in the types of lenses or frames that can be
obtained by any optometry practice, given the details of the product. Technological
advancements are largely made by manufacturers of lenses and/or frames and released to
the industry, putting everyone on par.
As stated before the franchises within the industry has made economy of scale and brand
awareness very relevant in optometry. Prior to this the South African Optometric
Assosiation (SAOA) established a price list which all the practitioners used. The
franchises are able to give considerable discounts and they advertise this widely. It is
quite safe to say then that they aim at the cost leadership position in the market. It is
relatively easy to copy low prices though by offering the same to clients inquiring about
discount or bettering written quotes of the price leader.
Gaining and sustaining a competitive advantage in such an environment asks for

differentiation in the full service experience of the client, in-house. If companies wish to
stay competitive they have no choice but to adopt total quality management (TOM).
According to Kotler (1997:54), TOM is an organisation wide approach to continuously
improve the quality of all the organisation processes, products and services. Here is an
intimate connection among product and service profitability. Higher levels of quality
results in higher levels of customer satisfaction while supporting higher prices and often,
lower costs. Due to the fact that there can only be one low cost leader in the field a huge
gap is left in which other optometric practises can differentiate themselves in different
ways, to gain competitive advantage. Differentiating the offer to customers on service
level is one of the best ways to gain and sustain competitive advantage in a highly
competitive environment.
1.3
Objectives of Study
Gaining competitive advantage can be achieved in various ways by differentiating the

offer to the user or by lower price. Keeping the problem statement in mind, the primary
goal of this study will be to develop a model by which a competitive advantage can be
gained and sustained in an optometric practice. Different ways of gaining competitive
advantage and sustaining it will be explored to establish and develop the suggested
model.
Secondary goals of the study can be summarised as follows:
To assess current perceptions on competitiveness in the optometric market.

To examine current literature on competitive advantage and total quality
management
1.4
Research Methodology
Exploration will be conducted quantitatively. Views and ideas of practicing optometrists

on competitiveness will be attained through the use of questionnaires. A random sample
of two hundred and fifty respondents will be selected from the South Mrican Optometric
Association (SAOA) list of registered optometrists in Gauteng. Questionnaires will be
mail-posted or e-mailed to the candidates.
Current literature on gaining and sustaining competitive advantage will be reviewed. Not
only will it indicate the critical issues pertaining to competitive advantage but also serve
as a benchmark against which the questionnaire results can be reviewed.
1.5
Demarcation of Study
The random sample taken from the registered optometrists in Gauteng can not be seen as
being representative of the profession nationally and less so internationally. Findings with
regard to competitiveness obtained in the study, can also not necceserally be made
applicable to other industries. Resistance to response is expected due to the relatively
small size of the market. Suspicion over the motives of the researcher might be quite
high, which can influence the response rate negatively.
The random sample taken from the SAGA list of optometrist may exclude those who are
not members of this body. Because this represents a small percentage of optometrists in
the practice it is of no great concern. Using the mailing method of distributing the
questionnaires might lead to low response rates, which can in turn induce bias. Making
personal or telephonic contact with the respondents might attain a higher response rate
but can adversely affect confidentiality.
1.6
Summary
Competitive positioning is important and crucial in the rapid changing environment

wherein organisations find themselves. Differentiation of service or product is of utmost
importance to satisfy current clientele and to draw new business. Any organisation unable
to differentiate to offer something unique finds itself part of a vast majority of lI middle
of-the-road ll organisations on the road to nowhere, even if general quality of service and
product is acceptable. The practical implication of the competitive positioning is more
complex than it seems at first sight. Definite goals and objectives need to be formulated
in order for the organisation as a whole to accomplish superior positioning compared to
the other competitors. Communication of these shared goals and objectives is almost
more important than the goals itself. Sustaining a competitive advantage calls for long
term strategies that will see to continuity in company approach to service provision. The
focus of this paper will thus be to give some background on the ways competitive
advantage can be gained and sustained in an optometric practice.
1.7
Chapter Outline
Chapter one serves as introduction to the study to be undertaken. Crucial issues like the
background to the study, problem statement and demarcation of the study are addressed.
In chapter two a comprehensive and in-depth literature overview will be given to set the
stage for the rest of the project. All possible and relevant sources will be consulted to get
a better understanding of competitive advantage and ways to achieve it.
Chapter three will deal with the research methodology of the study conducted and will
give insight into the ways and means attempted to make the study measurable,
representative and relevant.
The fourth chapter will reveal the results of the study in an academic, easy and
presentable way, giving readers the chance to understand and interpret it easily as well as
adhering to the formal structure expected in such a study.
The last chapter (Chapter five) will hold the conclusions of the study as obtained and
formulated out of the findings of Chapter four. Furthermore, recommendations will be
made, using the problem statement, literature study, results and conclusions as
foundation.
10
CHAPTER 2
COMPETITIVE ADVANTAGE DYNAMICS
2.1
Introduction
Organisations globally are faced with rapid changes in the market place. These changes
directly influence the basis of competitive advantage making it a dynamic and elusive
concept. Organisations are seldom fortunate enough to enjoy a competitive advantage that
is not eventually matched or countered by competitors. At the same time, merely catching
up to a rival's competitive edge is no assurance of success. The dynamics of competition
and the inevitable cycle of innovation, imitation, and equilibrium ensure that sole reliance
on anyone competitive advantage ultimately leaves an organisation vulnerable. Most
competitive advantages such as product differentiation are quickly matched or exceeded
by competitors. Organisations should never rely too heavily on anyone strategy or
product. They should continuously develop new products and organisational abilities.
Responses that are merely defensive or reactive to the innovations of competitors fail to
provide a competitive advantage. Active measures are needed that anticipate competition
with visionary strategies (Werther and Kerr, 1995:11).
Global competition increasingly demands a continuous search for new ways of adding
value, not only in the core strengths and technologies of the organisation but also across
the broad spectrum of activities that form its customer focused practices. Experimentation
implies anticipating and even initiating customer needs rather than simply responding
once demand becomes apparent.
Competitive advantage is a complex subject covering diverse issues focusing on

competitive tools such as quality, speed, innovation, leadership, time utility, place utility
and various other factors that will be discussed in this chapter. Developing a competitive
strategy is vital to the survival and prosperity of any organisation wishing to play any
significant role in its relevant industry. This chapter will review literature regarding
competitive advantage and relevant aspects to the topic.
11
2.2
Competitive Advantage Defined
McNamee (1990:1) states that the phrase "Competitive Advantage" was never as
commonplace as it is today and therefor argues that the current, common usage reflects
the progressive development of the discipline of strategic planning. One of the starting
points for the practice of strategic planning lies in the discipline of industrial economics
(McNamee, 1990:1). Driving this model is the economist's view that competition should
be fair and free before the industry as a whole will tend towards equilibrium.
The goal of the strategic planner could be described as to build sustainable and profitable
competitive advantage. The historical synthesis of the major landmark techniques
developed in the pursuit of this goal is outlined in Table 2.1 (see Appendix B).
Kotler (1997:53-54) defines competitive advantage as an organisation's ability to perform

in one or more ways that competitors cannot or will not match. Organisations ultimately
strive towards building a sustainable competitive advantage. Those that succeed deliver
high customer value and satisfaction, which in turn leads to high repeat purchases and
therefore high organisation profitability. Thompson and Strickland (1998:134) define
competitive advantage as the condition when the organisation has an edge over their rivals
in attracting customers and defending this position against competitive forces.
Michael Porter is one of the most renowned writers on the subject of competitive
advantage. Porter (1990:34) acknowledges that there is no one universal competitive
strategy and only strategies tailored to the particular industry and to the skills and assets
of the particular organisation succeed. More recent literature on competitive advantage is
still based on Porter's theory (Thompson and Strickland, 1998:136-172, Kotler, 1997:229
236) and used as benchmark for the current theory.
The type and scope of competitive advantage can be combined into the notion of generic
strategies, or different approaches to superior performance in an industry as discussed
earlier in Chapter 1 (see Figure 1.1). It is clear from the generic strategies that there is no
one type of strategy that is appropriate for every industry. Different strategies can
however coexist successfully in many industries. -Underlying the concept of generic
12
strategies (low-cost, differentiation, best-cost, focus) is that competitive advantage is at

the heart of any strategy (Porter, 1990:34).
According to Porter (1990:34) two central concerns underlie the choice of a competitive
strategy. The first concern is the industry in which the organisation competes. Industries
differ widely in the nature of competition, and not all industries offer equal opportunities
for sustained profitability. Competitors in the clothing industry might be more focused on
price and quality of products supplied to their customers as compared to the lawyer
focused on delivering a service to his/her client.
Thompson and Strickland (1998:175) argue that the most important drivers shaping an
organisation's best strategic options fall into two broad categories:
the nature of the industry competitive conditions

the organisations own resources and the competitive capabilities, market position
and best opportunities.
According to Thompson and Strickland (1998:175) the dominant strategy shaping

industry and competitive conditions revolve around the following issues:
what stage in the life cycle the industry is in (emerging, rapid growth, mature,
declining), the industry's structure (fragmented versus concentrated)
the relative strength of the five competitive forces
the impact of industry driving force
the scope of competitive rivalry (particularly whether the organisation's market is
globally competitive
Porter's (1990:34) second central concern is positioning within an industry. Competitive

position reflects a continuous battle among competitors. Some positions are more
profitable than others, regardless of the average profitability of that industry. Kotler
(1997:295) defines positioning as the act of designing the organisation's offering and
image so that they occupy a meaningful and distinct competitive position in the mind of
the target customer. Every organisation will want to promote those few differences that
will appeal most strongly to its target market. In addition to responding to and influencing
13
industry structure, organisations must choose a position within the industry. Positioning
embodies the organisation's overall approach to competing. At the heart of positioning is
competitive advantage.
Both industry structure and competitive position are dynamic. Continuous changes in
consumer demands or technological aspects for example, may fundamentally change the
way the industry is structured or alter the competitive positioning of an organisation.
Porter (1990:35) is of the opinion that the nature of competition is embodied in five
competitive forces (see Figure 2.1) and their strength varies from industry to industry. The
forces ultimately determine the long-term industry profitability because it shapes the
prices organisations can charge, the costs they have to bear and the investment required to
compete in the industry. The strength of each force is a function of industry structure or
the underlying economic and technical characteristics of an industry.
Figure 2.1
The Five Competitive Forces that Determine Industry Competition
THREAT TO NEW
ENTRANTS
BARGAINING POWER
OF SUPPLIERS
RIVALRY AMONG
EXISTING
COMPETITORS
THREAT OF
SUBSTITUTE
PRODUCTS OR
SERVICES
Source: Porter (1990:35)
14
BARGAINING POWER
OF BUYERS
In the long term, organisations succeed relative to their competitors if they possess
sustainable competitive advantage. Organisations across the world follows various
strategic manoeuvres and market initiatives to win customer favour, out-compete rivals
and secure a market edge. Due to the dependence of the strategies on the specific nature
of the organisation and industry, strategies is almost as unique as the organisation itself.
When the most important differences among competitive strategies are evaluated two
universal issues are evident (Thompson and Strickland, 1998:135), namely:
whether the organisation is targeting a broad or narrow market.

whether the organisation is pursuing a competitive advantage linked to low cost
or product differentiation.
Five distinct approaches stand out according to Porter (1990:35-39) (see Figure 1.1).
Thompson and Strickland (1998:136) support these approaches.
Low cost leadership - Appealing to a broad spectrum of customers based on being

the overall low-cost provider of a product or service. Low cost leadership is the
ability of an organisation to design, produce, and market a comparable product
more efficiently than its competitors. This efficiency is based on the organisation
having lower input costs relative to rivals while producing comparative goods to
the competition.
Broad differentiation - Seeking to differentiate the organisation's product offering
from that of rival companies in ways that will appeal to a broad spectrum of
buyers. Differentiation is the ability to provide unique and superior value to the
buyer in terms of product quality, special features or after-sale service. The
organisation cultivates those strengths that will give it a competitive advantage in
one or more of the value areas.
Best-cost provider strategy - Giving customers more value for the money by
combining an emphasis on low cost with an emphasis on upscale differentiation.
The aim is to have the best (lowest) costs and prices relative to producers of
products with comparable quality and features.
15
Focused or market niche strategy based on lower cost - Concentrating on a narrow

buyer segment and out-competing rivals by serving niche members at a lower cost
than rivals.
Focused or market niche strategy based on differentiation - Concentrating on a
narrow buyer segment and out-competing rivals by offering niche members a
customised product or service that meets their tastes and requirements better than
rival companies.
Competitive advantage of either type translates into higher productivity than that of
competitors. As opposed to efficiency, productivity is achieved by minimising input and
maximising output. The low-cost organisation produces a given output using less input
than competitors require. The differentiated organisation achieves higher revenues per
unit than competitors.
2.2.1
Low-Cost Provider Strategies
In markets where many buyers are price sensitive attempting overall low-cost provider
may prove to be a powerful competitive approach. The aim is to operate the business in a
highly cost-effective manner and open up a sustainable cost advantage over rivals. The
strategic target of the low-cost providers is low cost relative to competitors, not the
absolutely lowest possible cost. In pursuing low-cost leadership, organisations must
ensure that services and product features which is considered as essential by the buyer, is
included in the package offered. A product that is kept too simple in order to keep costs
down, might weaken instead of strengthen the competitiveness. Furthermore, it matters
greatly whether the organisation achieves its cost advantage in ways difficult for rivals to
copy or match. The value of a cost advantage depends on its sustainability.
A low-cost leader has two options for achieving superior profit performance. Firstly it can
use the lower-cost edge to under-price competitors and attract price-sensitive buyers in
great enough numbers to yield sustainable profits. Secondly it can refrain from price
cutting altogether, keeping it's current market share and use the lower-cost edge to earn a
higher profit margin on each unit sold, thereby raising the organisation's total profits and
overall return on investment.
16
Being the low-cost provider in the industry provides some attractive defences against the
five competitive forces (see Figure 2.1). These defences in combination or individually
strengthens the competitive position of the low-cost provider by raising the boundaries of
entry to other organisations due to superior profit ability of the organisation.
In meeting the challenges of rival competitors, the low-cost provider is in the

best position to compete on the basis of price, to use the appeal of lower price
to secure sales and to remain profitable in the face of strong price competition.
Low cost is a powerful defence in markets where many buyers are price
sensitive.
In defending against the power of buyers, low cost provide an organisation
with partial profit-margin protection, since powerful customers are rarely able
to bargain price down past survival level of the next most cost-efficient seller.
In countering the bargaining leverage of suppliers, the low-cost producer is
more insulated than competitors from powerful suppliers if the primary source
of its cost advantage is greater internal efficiency.
Manoeuvres to counter potential entrants may include price-cutting to make it
harder for a new rival to win customers. The pricing power of the low-cost
provider acts as a barrier for new entrants thus strengthening the competitive
position of the organisation.
Competing against substitutes, the low-cost leader is better positioned to use
low price as a defence against companies trying to gain market inroads with a
substitute product or service (Thompson and Strickland, 1998:145).
The biggest risk of the low-cost provider strategy is to focus too much on price-cutting,
resulting in lower rather than higher profitability. Secondly a low-cost leader strategy may
fail to emphasise proprietary strategies to handle or relegate rivals to playing catch-up.
The value of the cost advantage depends on its sustainability. Sustainability, in turn,
hinges on whether the organisation achieves its cost advantage in ways difficult for rivals
to copy or match. Thirdly the low-cost leader may become too fixated on cost reduction,
resulting in products or services not offering what buyers want (Thompson and
Strickland, 1998: 145-146).
17
2.2.2
Differentiation Strategies
Differentiation strategies are an attractive competitive approach when buyer preferences

are too diverse to be fully satisfied by a standardised product or when buyer requirements
are too diverse to be fully satisfied by sellers with identical capabilities. The essence of a
differentiation strategy is to be unique in ways that are valuable to customers and that are
difficult for competitors to imitate or copy. Differentiation enhances profitability
whenever the extra price the product commands outweighs the added costs of achieving
the differentiation. Competitive advantage results once a sufficient number of buyers
become strongly attached to the differentiated attributes, features or capabilities
(Thompson and Strickland, 1998:147).
There are four differentiation-based approaches to creating buyer value. One is to

incorporate product attributes and user features that lower the buyer's overall costs of
using the organisation's product. A second approach is to incorporate features that
increase the performance a buyer gets out of the product. Thirdly features to enhance
buyer satisfaction can be incorporated in non-economic or intangible ways. A fourth
approach is to compete on the basis of capabilities and to deliver value to customers
through competitive capabilities that rivals do not have or can not afford to match (Stalk
et aI, 1992:57-69).
There are no guarantees that differentiation will produce a meaningful competitive

advantage. If. buyers perceive little value in the unique attributes or capabilities an
organisation offer, then the differentiation strategy will not result in competitive
advantage. Attempts at differentiation are set to fail if the basis for the differentiation is
easily imitated by competitors. Rapid imitation means that an organisation never achieves
real differentiation and thus no competitive advantage. To build competitive advantage
through differentiation an organisation must seek lasting sources of uniqueness that are
burdensome for rivals to overcome (Thompson and Strickland, 1998:152). Other common
pitfalls and mistakes in pursuing differentiation include:
Trying to differentiate on the basis of a factor that does not lower a buyer's cost or
enhance a buyer's well being, as perceived by the buyer.
18
Over-differentiating to the extent that price is too high relative to competitors or

that the differentiating attributes exceeds the buyer's needs.
Charging too high a premium for the differentiated offer.
Ignoring the need to signal value and depending only on intrinsic product attribute
to achieve differentiation.
Not understanding or identifying what buyers consider as value.
(Porter, 1985:160-162)
A low-cost producer strategy can defeat a differentiation strategy when buyers are
satisfied with a basic product and do not think additional attributes are worth a higher
price.
2.2.3
Best-Cost Provider Strategy
This strategy aims at giving customers more value for their money. It combines a strategic
emphasis on low cost with strategic emphasis on more than minimally acceptable quality,
service, features and performance. The aim is to create superior value by meeting or
exceeding expectations of customers on key quality-service-features-performance
attributes and by beating their expectations on price. It is this superior value to the
customer, translating into competitive advantage for the organisation.
The competitive advantage of a best-cost provider comes from matching close rivals on
quality-service-features-performance and providing the offering at a cost lower than that
of rival organisations. A best-cost provider strategy has great appeal from the competitive
positioning point of view. It produces superior customer value by balancing a strategic
emphasis on low cost against a strategic emphasis on differentiation. Effectively it is a
hybrid strategy that allows an organisation to combine the competitive advantage of both
low cost and differentiation to deliver superior buyer value (Thompson and Strickland,
1998:152).
Thus achieving advantage requires an organisation to make choices. If an organisation is

to gain advantage, it must choose the type of competitive advantage it seeks to attain and
a scope within which it can be attained. According to Porter (1990:38) the worst strategic
19
error is to be stuck in the middle, or to try simultaneously to pursue all the strategies. This
is a recipe for strategic mediocrity and below-average performance, because pursuing all
the strategies simultaneously means that an organisation is not able to achieve any of
them because of their inherent contradictions.
2.2.4 The Value Chain
Porter (1990:40) argues that competitive advantage grows out of the way organisations
organise and perform discrete activities (see Figure 2.2). The basis of this argument is that
the operations of any organisation can be divided into a series of activities such as
salespeople making sales calls, service technicians performing repairs or optometrists
consulting clients.
Organisations create value for their buyers through performing these activities. The
ultimate value an organisation creates is measured by the amount buyers are willing to
pay for its product or service. An organisation is profitable if this value exceeds the
collective cost of performing all the required activities. To gain competitive advantage
over rivals, organisations must either provide comparable buyer value but perform
activities more efficiently (lower cost) than competitors, or perform activities in a unique
way that creates greater buyer value and commands a premium price (differentiation)
(Porter, 1990:40).
The activities performed in competing in a particular industry can be grouped into

categories as indicated in The Value Chain (see Figure 2.2). All the activities in the value
chain contribute to buyer value. Activities can firstly be divided into the category
involved in the ongoing production, marketing, delivery, and servicing of the product
(primary activities). Secondly support activities such as those providing purchased inputs,
technology, human resources, or overall infrastructure functions to support the other
activities. Every activity employs purchased inputs, human resources, some combination
of technologies, and draws on organisation infrastructure such as general management
and finance.
20
Figure 2.2
The Value Chain

Organisation infrastructure
Human resource management
Technology development
Procurement
~
~
,.....
INBOUND
OPERATIONS
LOGISTICS
OUTBOUND
MARKETING
AFfER-SALES
LOGISTICS
AND SALES
SERVICE
I
(Source: Porter, 1990:41)
To achieve a cost advantage, the cumulative costs across the value chain of the
organisation must be lower than the cumulative costs of rival organisations. There are two
ways to accomplish this (Porter, 1990:41):
Perform internal value chain activities more efficiently and manage the factors
that drive the costs of value chain activities in a cost-effective way.
Restructure the value chain to eliminate some cost-producing activities.
In order to pursue a low-cost strategy, the organisation has to scrutinise each cost-creating
activity and determine the main driving factor affecting the cost thereof. Knowledge about
cost drivers must be utilised in managing the cost of each activity downward. The
organisation must be proactive in restructuring the value chain, reengineering business
processes, and eliminating non-essential work steps. Successful low-cost providers
usually achieve their cost advantages by exhaustively pursuing cost savings throughout
the value chain (Thompson and Strickland, 1998:153).
The second way according to the value chain to establish competitive advantage is based
on differentiation. Differentiation is subject to the organisations understanding of what the
customer values, where along the value chain to create the differentiating attributes, and
about what resources and capabilities are needed to produce brand uniqueness. The
21
possibilities for differentiation exist in virtually every activity along an industry value
chain, most commonly in:
Purchasing and procurement activities that ultimately spill over to affect the
performance or quality of the organisations end product.
Product research and development activities that aim at improved product
design and performance features, expanded end uses and applications, shorter
lead times in developing new models, added user safety, or enhanced
environmental protection.
Production research and development and technology-related activities that
permit custom-order manufacture at an efficient cost, make production
methods more environmentally safe, or improve product quality, reliability and
appearance.
Manufacture activities that reduce product defects, prevent premature product
failure, extend product life, allow better warranty coverage, result in more end
user convenience, or enhance product appearance.
Outbound logistics and distribution activities that allow for faster delivery,
more accurate order filling, and fewer warehouse and on-the-shelf stock-outs.
Marketing, sales, and customer service activities that can result in superior
technical assistance to buyers, faster maintenance and repair services, more
and better product information or greater customer convenience.
Managers need to fully understand the value-creating differentiation options and the
activities that drive uniqueness to devise a sound differentiation strategy and evaluate
various differentiation approaches (Porter, 1990:124).
2.2.5
Business Strategies
Using either cost advantage or differentiation as business strategy the organisation need to
focus on the practical implementation of the strategy. The major aim of the business
strategy is growth. According to Kotler (1997:77) three major classes of growth
opportunities exists, and within them there are specific growth strategies as reflected in
Table 2.2.
22
Table 2.1
Major Classes of Growth Opportunities
INTENSIVE GROWTH
INTEGRATIVE GROWTH
Market penetration
Backward integration
Concentric diversification
Market development
Forward integration
Conglomerate diversification
DIVERSIFICATION GROWTH I
Source: Kotler (1997:78)
The major classes of growth opportunities (see Table 2.1) will be discussed in more detail
below.
2.2.5.1 Intensive Growth
Primarily, the course of action from corporate management should be to review whether
any opportunities exist for improving the existing business performance. The organisation
considers whether it could gain more market share with its current products in their
current markets (market-penetration strategy). The next step is to consider whether it can
find or develop new markets for its current products (market-development strategy).
Lastly it considers whether it can develop new products of potential interest to its current
markets (product-development strategy).
2.2.5.2 Integrative Growth
Often the sales and profits of a business can be increased through backward, forward, or
horizontal integration within the industry. Vertical integration extends the competitive
scope of the organisation within the same industry. It involves expanding the range of
activities of the organisation backward into sources of supply and/or forward toward end
users of the final product. Thus, if an optometrist invests in facilities to produce frames or
lenses rather than purchase them from outside suppliers, it remains in essentially the same
industry as before. The organisation can accomplish vertical integration by starting its
own operations in other stages in the industry's activity chain or by acquiring a
organisation already performing the activities it wants to bring in-house.
23
The only good reason for investing organisation resources in vertical integration is to
strengthen the organisation's competitive position (Harrigan, 1986:535). Integrating
backward generates cost savings only when the volume needed is big enough to capture
the same scale economies suppliers have. When the production efficiency of suppliers can
be matched or exceeded with no drop-off in quality, backward integration might also
generate cost savings. Backward vertical integration can produce a differentiation-based
competitive advantage when a organisation, by performing activities in-house that were
previously out-sourced, ends up with a better quality product/service offering improves
the quality of its customer service, or in other ways enhances the performance of its final
product. The strategic impetus for forward integration has much the same roots as
backward integration.
2.2.5.3 Diversification Growth
Diversification growth is desirable when opportunities can be found outside the present
business in highly attractive market segments and where the organisation has the mix of
business strength to be successful. Competitive advantage is created through
differentiation of current product/service offering to new and current consumers. Three
types of diversification are possible. The organisation could seek new products that have
technological and/or marketing synergy with existing product lines, even though the new
products themselves may appeal to different a different group of customers (concentric
diversification strategy). Secondly, the organisation might search for new products that
could appeal to its current customers even though the new products are technologically
unrelated to its current product line (horizontal diversification strategy). Finally the
organisation might aim at new businesses that have no relationship to the organisations
current technology, products, or markets (conglomerate diversification strategy) (Kotler,
1997:77-78).
2.2
Sustainability of Competitive Advantage
A generic strategy does not lead to above-average performance unless it is sustainable.

The sustainability of the three generic strategies demands that the competitive advantage
of an organisation resist erosion by competitor behaviour or industry evolution. Table 2.2
highlights the different risk profile of the respective generic strategies and can be used to
24
analyse how to attack a competitor that employs any of the generic strategies. A
organisation pursuing overall differentiation, for example, can be attacked by
organisations who open up a large cost gap, narrow the extent of differentiation, shift the
differentiation desired by buyers to other dimensions, or focus. Each generic strategy is
vulnerable to different types of attacks.
Table 2.2
Risks of the Generic Strategies
Risks of Cost Leadership
Risks of Differentiation
Cost leadership is not sustained
Differentiation is not sustained
Competitors imitate
Competitors imitate
Technology changes
Bases
Other
bases
for
cost
leadership erode
for
Risks of Focus
The focus strategy is imitated
differentiation
become less important to
buyers
The
target
segment
becomes
structurally unattractive
Proximity in differentiation is lost
Cost proximity is lost
Structure erodes
Demand disappears
Broadly-targeted
competitors
overwhelm the segment
The
segment's
differences
from other segments narrow
The advantages of a broad

line increase
Cost focusers achieve even lower

Differentiation focusers achieve
New focusers sub-segment the
cost in segments
industry
even greater differentiation in

segments
(Source: Porter, 1985: 21)
2.3.1
Sustainability of Cost Leadership
Cost advantage is sustainable if there are entry or mobility barriers that prevent
competitors from imitating its sources. Sustainability varies for different cost drivers and
from one industry to another. According to Porter (1985:112) and Thompson and
Strickland (1998: 145), some drivers tend to be more sustainable than others:
25
Scale - Scale is a key entry/mobility barrier, and the cost of replicating scale is
often high because competitors must buy share.
Interrelationships - Interrelationships with sister business units can force a
competitor to diversify in order to match a cost advantage. If there are entry
barriers into the related industries, sustainability can be high.
Linkages - Linkages are often difficult for an organisation to detect and require
co-ordination across organisational lines or with independent suppliers and
channels.
Proprietary learning - Learning is difficult to achieve in practice; it can also be
hard for competitors to catch up iflearning can be kept proprietary.
Policy choices to create proprietary product or process technology - replicating
product innovations or new production processes often poses great difficulties for
competitors if innovations are protected by patents or secrecy. Process innovations
are often more sustainable than product innovations because secrecy is easier to
maintain.
Sustainability not only stems from the sources of the cost advantage, but also from their
number. Cost advantage derived from one or two value activities provides an alluring
target for imitation by competitors. Cost leaders usually accumulate cost advantages
gained from numerous sources in the value chain that interact and reinforce each other.
This makes it difficult and expensive for competitors to replicate their cost position
(Porter, 1985:112).
2.3.2
Sustainability of Differentiation
The sustainability of differentiation depends on the continued perceived value to buyers

as well as the lack of imitation by competitors. Changing buyer needs are an ever-present
risk, which can eliminate the value of a particular form of differentiation. Competitors
may also imitate the organisation's strategy. According to Porter (1985:159)
differentiation will be more sustainable under the following conditions:
If the organisation's sources of uniqueness involve barriers - Proprietary learning,
linkages, interrelationships, and first-mover advantages tend to be more
26
sustainable drivers of uniqueness than simply a policy choice to be unique in a

single activity.
The organisation has a cost advantage in differentiating - The organisation with a
sustainable cost advantage in performing the activities that lead to differentiation
will enjoy much greater sustainability.
The sources of differentiation are multiple - The overall difficulty of imitating a
differentiation strategy depends in part on how many sources of uniqueness an
organisation has. Sustaining a differentiation strategy is usually greatest if
differentiation stems from multiple sources, rather than resting on a single factor
such as product design. Differentiation that results from co-ordinated actions in
many value activities will usually be more durable, since it requires wholesale
changes in competitor behaviour to imitate.
Organisations create switching costs at the same time it differentiates - Switching
costs are fixed costs incurred by the buyer when it changes suppliers, which allow
an organisation to sustain a price premium even if its product is equal to that of
competitors. Due to differentiation creating switching costs, sustainability of
differentiation is increased. Switching costs, like differentiation itself, grow out of
the way, in which a product is used by the buyer. Activities that make an
organisation unique can frequently raise the cost of switching since the buyer
often tailors its activities to exploit the organisation's uniqueness.
Thompson and Strickland (1998:152) also supports this view and adds that any
differentiation element that works well tends to draw imitators. Rapid imitation has the
effect that an organisation never achieves real differentiation and constant innovation is
needed to retain the differentiation advantage.
2.3.3
Sustainability of a Focus Strategy
Porter (1985:267) states that the sustainability of a focus strategy is determined by three
factors:
27
Sustainability against broadly targeted competitors - The size and sustainability of

the competitive advantage created through focus as opposed to the broadly
targeted competitors.
Sustainability against imitators - The mobility barriers to imitating the focus
strategy or being out-focused by a competitor with an even narrower target.
Sustainability against segment substitution - The risk that buyers will be drawn
away to other segments the focuser does not serve.
Thompson and Strickland (1998:156) site some risks of the focus strategy:
Competitors find effective ways to match the service provided to the niche.
The preferences and needs of the niche buyer shifts toward other product
attributes.
The segment might become so attractive that other competitors enter it, splintering
segment profits.
2.3.4
Creating Competitive Advantage through Service
The above theories only touch on the subject of the human interaction and the role this
plays in delivering the service/product package. As stated in chapter one, optometry can
not be classified as a true service only. It also offers a product range in the form of
spectacles, sunglasses, contact lenses and/or relative accessories. The whole chain of
service and product delivery classically involves multiple interactions between client,
staff and optometrists. Collier (1994:5) calls these interactions "moments of truth" in
which the organisation must create and establish the milieu of ultimate customer care. All
staff members need to have the successful creation of the "moments of truth" as their
personal goals in order for the service organisation to achieve success. Because of this
complexity, competitive advantage is an elusive concept and implementation is not only
difficult but also essential for survival in the dynamic competitive environment.
Irons (1997:12) states that each service encounter will present its own mix of product and
service elements. The balance may even be shifted, or hard (tangible) elements introduced
to reduce the transiency of the service or strengthen the memory, as, for example, an
28
airline might give passengers a gift or a restaurant might give customers a copy of the
menu. But the essentially soft nature of a service remains and for the management of
services it is the seven aspects listed below, which are crucial. Horovitz (2000:22) states
that opportunities for extending value exist before, after and around the classical activities
the customer carriers out with the organisation. By using these opportunities, the
organisation provide more than a service, it offers a solution to the customer.
Commercially there is a need to consider if it is the service which give distinction or a
significant competitive advantage, rather than simply the values of the core product.
According to Irons (1997:13) seven elements distinguish services:
Services are transient - they are consumed there and then. They have no lasting
material being and may leave only memories or promises.
People mainly represent services - they cannot be separated from the person or the
provider, whose personal characteristics and self-perceptions are on show to the
customer and indeed form an important part of customer perception.
Services are only finally selected face-to-face with the customer and at the time of
consumption.
Services are generally perishable - you cannot have a production run and store
services against future demand. They are, therefore, essentially a series of one-off
production runs.
Standardisation is difficult to achieve - it is difficult to exercise the same controls
over production (service delivery) as you would with a product, for example through
quality controls. This production/consumption process goes on, for the most part,
unsupervised and depends on the individual reactions of the operator for success.
Customers influence the process not just indirectly, as through research or even the
exercise of choice, but directly since they participate in and help make the final
product. Indeed in some cases, as, for example, a restaurant or bar, the customer may
actually be the key ingredient in success - it is they, rather than the food or drink,
which are the attraction to others.
As a result of the previous six points, it is the culture in which these acts are
performed which mostly condition perceptions of service and this culture is internal
and external. It is about the way work is done and the way it is managed.
29
Kotler (1997:468) partly supports this view of Irons by stating that services have four
major characteristics, namely: intangibility, inseparability, variability and perishability.
Expectations and experiences intersperse, and customers draw much of their final belief
from the personality and behaviour of the person they meet, because he or she provides
more clues as to the personal suitability of the solution offered than does the core product
itself. This emphasises the old cliche that services are about people, though it would be
better to rephrase it as services are people. It is from these interactions with the
organisation that customers form their perceptions of the individual rightness of a
solution, whether it be to assess value, decide to buy, repeat purchase or recommend to
others. In turn, these interactions are repeated in the internal relationships within the
organisation, which can be seen as a triangle as shown in Figure 2.2. Whereas the
traditional manufacturing organisation operates only along the right-hand axis, the service
business operates along all three, with those interactions that are so vital to the
perceptions of customers along the base. To be in balance, it is necessary for the culture
on the base axis to relate to that on the other axes.
Figure 2.3
Organisation
Traditional marketing
Internal culture
Market
Staff
The interaction
Source: Irons (1997:15)
30
This seLVice revolution has taken shape due to the following trends (Irons, 1997:7):
The emergence of the discriminating aware customer. Delivery will thus

increasingly become the focus of effort and reward. People have become more
experienced, more demanding, more inclined to seek value and more often in need
an opportunity to identify with a supplier who understands them.
Technology is only really successful where it plays a part in bridging the gap
between the organisation and customer and helping to build relationships.
Customers increasingly seek seamless solutions where it is their needs, not
technical considerations that are supreme.
Meeting the seLVice revolution head on calls for radical changes in management
and a holistic approach to implementation.
The key decisions faced by most organisations today are linked to the consequent
demands for better seLVice at delivery. This is a great opportunity, but only if such
seLVices can be provided straightforwardly, without bureaucracy and in a way that makes
the customer feel a part of the transaction, not just a target. However, the critical barrier to
achieving such seLVice success on any long-term and stable basis lies beyond simply
identifying the need to respond to customers. It is of instrumental importance to align staff
behind the tasks necessary to achieve the new objectives and, above all, to develop an
approach to management which permits this (Irons, 1997:8, Booms and Bitner, 1981:48).
Indeed, this is probably the greatest challenge faced by business today, because what is
needed is radically different from traditional structures and management styles, with a
greater consistency of both internal and external relationships.
In short the impact of seLVice is to be felt way beyond the confines of customer care or
other such tactical considerations. In true service companies, customer expectations are
the basis for strategic management. Good seLVice requires a high degree of operational
efficiency across many areas of activity and competence. Unless this efficiency has a
strategic context, it will never become effective at the only point where it really matters
with the customer, since it is here that value is created satisfaction and profit are generated
(Irons, 1997:11). In support, Kotler (1997:478) states that excellent managed seLVice
companies share the following six characteristics: a strategic concept, a history of top
31
management commitment to quality, high standards, systems for monitoring service

performance, systems for satisfying the complaints of customers and an emphasis on
employee and customer satisfaction.
There has to be a total focus on the market; indeed, the whole business has to be driven by
the customer not simply focused on the customer. Customer focus is often a simplistic
substitute for internal focus, and simply leads to a new bureaucracy, for example that of
quality, with true service as an afterthought. Customer driven, on the other hand, means
that it is customer expectations and the need to fulfil them, or better still exceed them,
which sets the agenda (Irons, 1997:15). Research conducted by Parasuraman and Berry.
(1991:16) established that customers evaluate service quality along five dimensions
namely:
Tangibles - physical facilities, equipment and appearance of personneL

Reliability - ability to perform the promised service dependably and accurately.
Responsiveness - willingness to help customers and provide prompt service.
Assurance - knowledge and courtesy of employees and their ability to inspire trust
and confidence.
Empathy - caring, individual attention to the customer.
In a service organisation, most of the efforts are aimed at targets - customers and staff
and the product can only be made at the point of sale, with the involvement of the
customer. Customer contact, and so their perceptions of the organisation and its offer are
no longer confined to a small group but are a function of a range of people who may even
comprise the entire staff (Irons, 1997:31). Nor does the customer see the product that has
been bought as separate from the interactions. In fact, for the customer, perceptions of
service are often taken from the delivery of the service, both at the time of sale at all of
the points of contact during the relationship, that is, after sale. For this is what any service
organisation is selling - not glasses or contact lenses or insurance policies but millions and
millions of transactions. These are the moments of truth when ideas and plans are bought
or rejected. These moments of truth, where the customer experience is gained are not
once-off events but part of an ongoing process in which such moments occur again and
again.
32
2.3.5
Competitive Advantage through People
The success that comes from managing people effectively is often not as visible or
transparent as to its source. Cutting and fitting an optical lens into a spectacle frame is
visible. The culture and practices that enable an optometry practice to achieve its success
are less obvious. It is difficult to really understand culture, how people are managed, and
the effects of this on their behaviour and skills are sometimes seen as the "soft" side of
business.
Even when culture is not dismissed, it is often hard to comprehend the dynamics of a
particular organisation and how it operates because the way people are managed often fits
together in a system. It is easy to copy one thing but much more difficult to copy
numerous things or the complex concept of culture. Through seeing the work force as a
source of strategic advantage, not just as a cost to be minimised or avoided, organisations
are often able to successfully out-manoeuvre and outperform their rivals.
At the heart of viewing people as a source of competitive advantage is the recognition that
in a service business, achieving objectives or creating change can only be met through
people (Irons, 1997:60).
Horovitz (2000:93) also states that the quality of service
delivered by an organisation depends, at least partly, on how staff interacts with

customers and therefor the impact of good people management can be tremendous.
This shift has profound consequences for any service business. The customers want to be
treated as individuals. Employees provide an opportunity to create a commercial
advantage from service; but the corollary of this is that the very people who have to
perform the service also want to be treated as individuals. Unless this is clearly
understood, then the seeds of destruction of change are sown at the same time as the seeds
of creation.
In his book Competitive Advantage Through People, Henry Pfeffer describes sixteen
practices for managing people that will lead to competitive advantage (1994:30). Pfeffer
emphasises the importance to recognise that the practices are interrelated and it is difficult
to do one thing by itself with much positive results.
33
Employment Security - This signals a long-standing commitment by the

organisation to its work force.
Selectivity in Recruiting - Security in employment and reliance on the work force
for competitive success mean that the organisation must be careful to choose the
right people, in the right way.
High Wages - If the organisation wants to recruit outstanding people, and want
them to stay with the organisation, paying more is helpful, although not absolutely
necessary. High wages not only tend to attract more applicants, permitting
organisation to be more selective in its hiring but also send a clear message that
the organisation values its people.
Incentive Pay - Fairness and justice virtually dictate that if people are responsible
for enhanced levels of performance and profitability, they want to share in the
benefits. It is possible and desirable to reward performance, on an individual level
as well on the basis of performance by groups, sub-units or the entire organisation.
A comprehensive review of the literature on profit sharing, which includes gain
sharing, concludes that profit sharing and productivity are positively related
(Wietzman and Kruse, 1990:139).
Employee Ownership - Employees who have ownership interests in the
organisations for which they work have less conflict between capital and labour
to some degree they are both capital and labour. Employee ownership, effectively
implemented, can align the interests of employees with those of shareholders by
making employees shareholders too (Pfeffer, 1994: 38).
Information Sharing - The adoption of some form of gain sharing requires
information sharing. Disclosure is integral to profit sharing because employees
need, at the very least, to be informed as to what profit is. If people are to be a
source of competitive advantage, they must have the information necessary to do
what is required to be successful (Ogden, 1992: 237).
Participation and Empowerment - Sharing information is a necessary precondition
to encouraging the decentralisation of decision making and broader worker
participation and empowerment of the employees to control their own work
process. Autonomy is achieved through moving from a system of hierarchical
control and co-ordination of activity to one in which lower-level employees, who
34
may have more or better information, are permitted to do things to enhance

performance (Pfeffer, 1994: 43).
Teams and Job Redesign - The alternative to the traditional organisational

hierarchy is the use of teams. Because most people are inherently social creatures
deriving pleasure from social interaction, groups exert a powerful influence on
individuals. Groups enforce conformity pressures, and these include norms about
appropriate work quantity and quality.
Training and Skill Development - Worker autonomy, self-managed teams, and

even a high-wage strategy depend on having people who not only are empowered
to make changes and improvements in products and processes but also have the
necessary skills to do so. Consequently, an integral part of most new work systems
is a greater commitment to training and skill development. (pfeffer, 1994: 45).
Cross-Utilisation and Cross-Training - According to Pfeffer (1994: 47), having

people do multiple jobs has a number of potential benefits, including more work
satisfaction through variety, the potential for newcomers to a job to see things that
can be improved. Pay incentives, along with the prospect of a more varied and
interesting workday proves to be valuable lures in recruiting (Alster, 1989:62).
Symbolic Egalitarianism - One important barrier to decentralising decision

making, using self managed work teams, and eliciting employee commitment and
co-operation is symbols that separate people from each other. It is thus important
that organisations that need to have some forms of symbolic egalitarianism - ways
of signalling to both insiders and outsiders that there is comparative equality and it
is not the case that some think and others do not. Egalitarian symbols come in
many forms, including dress code and physical space. Whatever these symbols
may be it seems difficult to eliminate them.
Wage Compression - Teamwork is fostered by common fate, and common fate is

enhanced to the extent that people in an organisation fare comparably in terms of
the rewards received. Although issues of wage compression are most often
considered in terms of hierarchical compression, and particularly Chief Executive
Officer (CEO) pay relative to others, there is a horizontal aspect to wage
compression as well. It can have a number of efficiency-enhancing properties for
organisations. In a strong-culture organisation, one will tend to find more
compressed pay because pay dispersion lessens the sense of community and
35
common fate that strong-culture organisations seek to build as a source of

competitive success (Pfeffer, 1994:53).
Promotion from within - Promotion from within is a useful adjunct to many of the
practices described. It not only encourages training, skill development and
provides a sense of fairness justice in the work place but also facilitates
decentralisation, participation, and communication because it helps promote trust
across hierarchical levels.
Long-Term Perspective - Achieving competitive advantage through the work force
inevitably takes time to accomplish. Once achieved though, competitive advantage
through employment practices is likely to be substantially more enduring and
more difficult to duplicate.
Measurement of the Practices - Measurement is a critical component in any
management process, and this is true for the process of managing the work force
of the organisation. Measurement serves to provide feedback as to how well the
organisation is implementing various policies as well as ensuring that what is
measured will be noticed. Organisations committing seriously to achieving
competitive advantage through people need to make measurement of their efforts a
critical component of the overall process (Pfeffer, 1994:55).
Overarching Philosophy - Possibly the most important, is having an overarching
philosophy of management. It provides a way of connecting the various individual
practices into a coherent whole and also enables people in the organisation to
persist and experiment when things do not work out immediately. The survival of
the separate practices that appear to generate success is somewhat dependent on
the bond that the system of values and beliefs of how to manage people create
among it.
The underlying philosophy of Pfeffer (1994:65) is that once competitive advantage

through employment practices is obtained, it is likely to be substantially more enduring
and more difficult to duplicate. Nevertheless, the time required for implementing these
practices and start seeing results will mean that a long-term perspective is needed. The
specific implementation of the practices, and the form they may take, are obviously
contingent not only on strategy but also on other contextual factors such as location,
nature and interdependence of the work. Pfeffer (1994:65) emphasises that there are many
36
other sources of competitive success. However, particularly because many of the other
bases of success are more readily imitated, gaining competitive advantage through people
will be more sustainable and less readily copied.
2.3.6 The Learning Organisation
Focusing on training and the use of a contingent work force will shed some light on how
viewing people as a source of success changes the formulation of both public policy and
managerial strategy. If competitive success is achieved through people, then the skills of
those people are critical. Consequently, one of the most obvious implications of the
changing basis of competitive success is the growing importance of having a work force
with adequate skills. Historical studies indicate that between 1929 and 1982, education
prior to work accounted for 26% of the growth in the productive capacity of the United
States, with learning on the job contributing to an additional 55%. It seems clear that
learning in school and learning on the job are by far the most important factors behind
American economic growth and productivity in the twentieth century, and will determine
the nation's economic prospects in the next (Ferman et aI, 1990: 30).
If the organisation aims to build competitive advantage through people, then it is

important to build a work force that has the ability to achieve competitive success and that
cannot be readily duplicated by other organisations. The dynamic nature of competition
requires a hybrid, almost contradictory organisational structure. It must be entrepreneurial
enough to generate innovations on several fronts, yet integrated and disciplined enough to
transform a promising idea into a market advantage. Moving away from command-and
control structures to flatter, organic, and ad hoc structures increases organisational
flexibility and individual acceptance of change.
By definition, developing multiple competencies requires the creation of learning

organisations dedicated to continuous improvement in systems and people as well as in
products and services. The learning organisation seeks to continuously improve and add
to the competencies of its members and, therefore, of itself.
Learning organisations contribute to an internal work environment that is entrepreneurial

enough to generate innovations on several fronts, yet disciplined and co-ordinated enough
37
to transform a promising idea into a new competitive advantage. In today's competitive

environment, the ability of an organisation to recognise, incorporate, and disseminate
valuable new information is likely to be the key to its survival. Because competitive
advantage can be derived from any aspect of the organisation's activities (Porter,
1990:40), the habit of learning must be distributed throughout the organisation. Learning
allows it to rapidly appropriate the skills that are the foundation of new competitive
strategies. Without learning, any combination of competencies eventually becomes
outdated and the competitive advantage is soon matched by rival organisations.
2.4 Strategies for Defending the Competitive Advantage
Defensive strategy aims to influence a challenger's calculation of the expected return

from entry or reposition, causing the challenger to conclude that the move is unattractive
or to decide on a strategy that is less threatening. To do this, a defender invests in
defensive tactics. Most defensive tactics are costly and reduce short-term profitability in
order to raise the longer-term sustainability of an organisation's position. However, most
organisations cannot eliminate the threat of attack completely, except at prohibitive costs.
Hence a defender should invest to reduce the threat of attack to an acceptable level,
balancing the risk of attack against the cost of defence.
Porter (1985: 487-500) outlines three broad defensive strategies:
2.4.1
Raising structural barriers
Increasing expected retaliation
Lowering the inducement for attack
Raising structural barriers
Examples of structural barriers to entry/mobility that may be present in an industry

include:
Economies of scale
Proprietary product differences
Brand identity
38
Switching costs
Capital requirements
Access to distribution
Government policy
Expected retaliation
While offensive moves to enhance competitive advantage in the value chain can raise
structural barriers, this section will concentrate on defensive moves. Defensive tactics that
raise structural barriers are actions that block logical avenues of attack for challengers.
2.4.1.1 Fill product or positioning gaps
Barriers are increased when an organisation fills gaps in its product line or pre-empts
alternative marketing themes that a challenger might logically employ. Such moves force
a challenger to take the defender head-on instead of being able to gain market share
unopposed.
2.4.1.2 Block channel access

When an organisation makes it more difficult for a challenger to gam access to
distribution channels it raises a major structural barrier. Defensive strategy should be
directed not only toward the channels of the organisation but also toward blocking access
to other channels that may be a substitute channel or a springboard for the challenger's
entry in the organisation's channels.
2.4.1.3 Raise buyer switching costs
The organisation can raise barriers by raising the switching cost of buyers. Low-cost
training of buyer personnel, participation in joint product development with buyers or
ownership of on-premise storage facilities on the location of buyers is some examples of
raising this barrier.
39
2.4.1.4 Defensively increase scale economies
Barriers increase if economies of scale grow. It is often possible to increase scale

economies in areas such as advertising and technology development, where scale
thresholds are competitively determined. The organisation can increase scale economies
most effectively in value activities where minimum scale is determined by technology.
Often this implies differentiating in ways where the organisation has a cost advantage in
differentiation.
2.4.1.5 Form coalitions to raise barriers
Coalitions with other organisations can raise barriers in many ways such as foreclosing
alternative technologies or filling product gaps. Similarly coalitions with likely
challengers may be a way to convert a threat into an opportunity.
2.4.2
Increasing expected retaliation
This tactic is an action that increases the threat of retaliation perceived by challengers.
The threat of retaliation hinges on both the perceived probabilities of retaliation and its
expected severity. A range of tactics is available to a defender to signal its intentions to
retaliate against potential challengers. Expected retaliation can be increased by tactics that
indicate that an organisation intends to vigorously defend its position, that create
conditions making it inevitable that the organisation must retaliate, or that indicate it has
the resources to do so.
2.4.2.1 Signal commitment to defend
The organisation increases expected retaliation if it consistently signals its intention to

defend its position by:
Announcing intentions by management to defend market share in the industry.

Corporate pronouncements of the importance of a business unit to the
organisation.
40
Announced intention to build adequate capacity ahead of demand.
Such signalling can and should be carried out consistently via all the available channels,
such as public statements, trade press, distributors, and buyers, in order to have the
greatest defensive impact. Many of the ways to increase the perceived threat of retaliation
force the organisation to increase its level of risk. Indeed, by raising the risk of the
organisation lead to tactics becoming more significant to competitors. The organisation
must thus be prepared to invest if it wants to improve the sustainability of its position in
this way.
2.4.2.2 Signal incipient barriers
Most tactics that raise effective structural barriers require the organisation to make a
significant investment. However, an organisation may sometimes be able to achieve the
same effect through market signalling or partial investment. This increases the expected
retaliation by the organisation in the future. Such market signalling can cause challengers
to postpone future commitments until more information can be gained to learn if the
signals are credible.
2.4.2.3 Match guarantees
The organisation raises the expectation of retaliation if it commits itself to match or better
prices or other terms offered by competitors. A public stance that it will do so often deters
challengers from attempting to gain position through discounting, particularly if an
organisation backs its claim once or twice in a publicised way.
2.4.2.4 Establish defensive coalitions
Coalitions with other organisations may increase the threat of retaliation by affecting
many of the factors described above. A coalition may even provide blocking positions or
retaliatory resources n organisation itself does not have.
41
2.4.3
Lowering the inducement for attack
The third type of defensive tactic is actions that lower the inducement for attack instead of
raise its cost. Broadly, profit serves as the inducement for a challenger to attack an
organisation. The profits expected by a challenger if it succeeds are a function of an
organisation's own profit targets as well as the assumptions held by potential challengers
about future market conditions.
2.4.3.1 Reducing profit targets
The profits earned by an organisation are a highly visible indication of the attractiveness
of its position. An essential part of any defensive strategy is to decide what current price
and profit levels are sustainable. Many organisations invite attack by earning too high
profits. The organisation can deliberately choose to forgo current profits to reduce the
inducement for attack. This may imply lowering prices and raising discounts. There must
remain a balance between the structural entry/mobility barriers and the threat of retaliation
versus the organisation's profitability.
2.4.3.2 Managing competitor assumptions
The assumptions of the challenger about future industry prospects may lead it to attack
another organisation. If challengers believe that an industry possesses explosive growth
potential, they may attack an organisation despite high barriers. While an organisation
cannot credibly cause potential competitors to dismiss realistic assumptions about the
industry, defensive strategy should attempt to make the assumptions of the potential
challengers more realistic.
Defensive strategy can be viewed in a broad sense as influencing competitor assumptions,

including their assumptions about retaliation and the height of barriers. Influencing
competitor assumptions about future industry conditions is an important part of the task.
42
2.5
Pitfalls in Defence
According to Porter (1985:512), there are many pitfalls in defending competitive position.
Even strongly positioned leaders are regularly attacked successfully because they make
errors in defensive strategy. Porter (1985:512) is of the opinion that the single biggest
pitfall in defence is a narrow concern with short-term profitability, which conflicts with
the reality that defence requires investment. Internal decision-making processes in many
organisations are biased against defensive investment. They reward short term
profitability, and fail to reward the reduction of risk that defensive strategy seeks. The
benefits of a successful defence strategy are often hard to measure, since a successful
defence means that nothing happens. The second largest pitfall in defensive strategy
according to Porter (1985:512), is complacency. Organisations often do not examine their
environment for potential challengers, or seriously consider the responsibility that
challenges will occur. As a result, it is striking how often organisations fail to make
simple and inexpensive defensive moves. Moreover, organisations often actually invite
competitors into their industry by earning unsustainable margins or by ignoring buyer
needs.
2.6
Competitive Advantage through Customer Focus
The importance of customer focus is clear from the above stated information, for without
such a focus it is difficult to build around the experiences customers internally construct.
However, in many organisations the term customer focus is merely a way of redressing
what they do already, but in the customer's terms. If an organisation is to be truly
competitive, then it is necessary for it to be driven by the customer (Irons, 1997:43). This
is achieved by having the ambitions and aims of the organisation fulfilled through
customers having problems solved. This is not some new revelation, since recruiting the
right people, maintaining stability and in so doing fostering real commitment has always
been what has kept customers coming back again and again. Selling frames and contact
lenses are not exiting but giving employees a feeling of being involved in shaping the
vision, of it being their domain in which they can have pride and making it more
appealing and satisfying to do their jobs can foster continues high performance levels.
43
To summarise it can be said that the vision of a business has to be rooted in the customers
and their perceptions of what is important. This all comes together at the interaction
between the customer and the organisation - usually, face to face with staff - and it is
these moments of truth which are the real product of the business. To the customer they
are part of a process, not stand-alone events.---.
The organisation must be customer driven
meaning that interactions have to be the focus at all times and further means that what
happens there must be geared toward the needs of the customers, not those of the
business.
2.6.1
Organisation Culture and Competitive Advantage
All organisations possess a culture, this being the set of beliefs about the purpose of the
organisation, the values by which it executes that purpose and the structures and style
which have evolved or have been developed to control the organisation (Irons, 1997:56).
Without such a framework it would be difficult, if not impossible, for people to
collaborate; with it, it is possible to give direction, at least to some extent, towards a
common goal.
There are a number of significant factors to recognise with regard to culture in a service
business (Irons, 1997:57):
All service organisations have a culture. The only question is whether or not it is
recognised and forms a distinct personality with clear values, related to the
market.
The link between internal culture (what happens within the organisation) and
customer perceptions is direct. What the organisation is, rather it claims to be, is
clearly visible to customers.
Because of the above linkage, customers help shape the culture. They participate
directly in the final processes of forming the service they receive, and their
expectations and reactions are a key part of conditioning performance.
The result - which is of profound consequence at both a strategic and operational
level - is that the organisation culture is a key part of what the customer buys.
44
The value of culture is a factor of
the
market
values,
the
position
the
organisation need to occupy in that market and the ability to match internal
cultural and management values to effectively direct the implementation and
creation of customer experiences which meet or exceed expectations.
These key values need to be simple, clear and direct and should shared by everyone as
part of their own beliefs as well perceptions of the aim of the organisation. Whatever the
culture, it is important that it is strong and consistent.
But the service or the service/product package is a simple outcome of a complex process
(Irons, 1997:46). The complexity is the relationships formed from the various factors
involved in the service triangle (Figure 2.2). These all come together at the interaction, the
moments of truth, which determine the success or failure of the service encounter. At each
and everyone of these interactions, the success or failure can be temporary, fleeting or
completely final. The interactions can rarely be re-staged, such as being withdrawn for
further checks, can never be entirely controlled, because both events and people are never
entirely predictable, nor free of interference in their very production, because of the
customers' direct involvement in the process. Satisfaction or dissatisfaction with a service
is at least 70% due to this delivery (Irons, 1997:48).
Relationships are critical in this, because the work environment is intermixed with the
customer's own environment, at this crucial point of final production and consumption.
Whether intended or not, the scene is for creating a relationship, even though the
customer may never see it as that or wish to be persuaded of it. Nevertheless, it may
reasonably be said that services are relationships; successful services are successful
relationships, and these relationships are created from the perceptions of daily practice
and reward shared between all the parties involved in the triangle. Motivated employees
will make transaction encounters smooth and cost-effective. There is, in fact, a strong
correlation between motivation and productivity in the service area. Physical encounters
are on the front-line as are the staff orchestrating it (Horovitz, 2000:93).
It is vital to recognise that building relationships is different to simply selling and thus
imply employees to make compromises in order to effectively deliver service. Companies

do not have customer relationships but employees do. It depends, for example, on whether
45
the receptionist in the optometry practice just sees herself as answering phones and
booking appointments or being responsible for her domain, providing for the needs of the
clients dealing with her. This can only be achieved through rigorous recruitment,
involving people in decision-making and setting an example of customer service
commitment. Conventional structures and conventional management are often barriers to
empowerment, relationship building and employee involvement (Irons, 1997:52-53).
Research in the USA in the early 1980s (Schneider and Bowen, 1983), showed that, even
though they viewed service from different perspectives, employee and customer
perceptions of organisational effectiveness correlated and when employees felt that their
organisation emphasised service, by word and deed, customers had service experiences.
In other words, the internal culture is clearly evident to buyers even if they do not
recognise it as such.
2.7
The Changing Basis of Competitive Advantage
The changing nature of competition has upset early models of strategy, including that of
Porter, which often implied that companies competed on the basis of a single skill or
capability (Werther and Kerr, 1995:11). Strategic typologies have reinforced the idea of
static, uni-dimensional competition with categories such as lowest-cost producer or
technology leader.
Werther and Kerr (1995:11) argue that when the basis of competition in an industry shifts,
competitors gain and lose relative advantage, forcing a search for new sources of
differentiation. They are of the opinion that shifting the basis of competition requires new
competitive skills, not just the deepening of current ones. Sustainable competitive
advantage among competitors increasingly requires building strategy on a foundation of
multiple competencies which strengthen several dimensions of the organisation's
competitive position and are not as readily diluted by copycat competitors.
With a strategy based on multiple competencies and the economies of scope that result
from their interaction, the competitive advantage of an organisation is more difficult and
more expensive to dislodge or match. Thus, the advantage is more likely to be sustainable.
The competencies that may lead to sustainable competitive advantage is a function of the
46
CHAPTER 3
RESEARCH METHODOLOGY
3.1
Introduction
In chapters 1 and 2 the background literature for the understanding of the study was
discussed. This chapter will discuss the research methodology followed in analysing
the current perception of competitive advantage in the optometric practice.
Firstly, the research methodology will be stated agam. The sample size will be
discussed followed by the research design and survey method used. This will be
followed by an in depth discussion of the development of the questionnaire.
3.2
Research objectives
As stated in chapter 1, the primary goal of this study will be to develop a model
through which competitive advantage can be gained and sustained in an optometric
practice. Different ways of gaining competitive advantage and sustaining it will be
explored to establish and develop the suggested model.
Secondary goals of the study can be summarised as follows:
To assess current perceptions on competitiveness in the optometric market.
To examine current literature on competitive advantage and total quality

management
3.3
Sample size
As described in the research objective, the study will focus on optometrists in the
greater Gauteng region. A list of names was obtained from The South African
Optometric Association (SAOA). The list for the Gauteng region will be used to
randomly select 250 optometrists, representing the full sample size.
49
3.4
Research design
With the sample size in mind, the next step is to investigate the methodology that will
be used in this study to analyse the current perception about competitive advantage
among the specific sample of optometrists. The question of how to gain and sustain
competitive advantage in the optometric practice, which was the question that
prompted the study, is a good starting point. From this base question, specific research
questions should be derived. With the general research question(s) derived,
investigative questions should be compiled. Investigative questions are usually
required in cases where the research question is not well defined. The formulation of
the measurement questions, consisting of the questions actually asked to respondents,
will follow next.
Mter the sampling plan has been completed, the design must be decided on. The
design can for example entail a secondary data study, case study, survey, experiment
or simulation (Cooper, Emory, 1995:61, Rose, 1982:14). The survey method will be
used for the purposes of this study.
Following the completion of the survey method, for example a questionnaire, it needs
to be tested. Testing is essential in order to detect weaknesses in the design and
instrumentation. The test could for example identify confusing, awkward or offensive
questions. Mer the testing has been completed, the measurement questions are
revised and the final survey instrument is released for data collection.
Once the data has been collected it needs to be analysed and interpreted. The analysis
and interpretation process will be discussed in more detail in chapter 4.
3.5
Survey method
Research designs can be classified by the communication method used to obtain the
source data. The two basic alternatives includes observing conditions, events, people
or processes and on the other hand questioning or surveying people about various
topics (Cooper, Emory, 1995:269, Van der Merwe, 1996:282).
50
Observation is limited by the fact that only visually or objectively perceived

information can be gathered with this method. Information about past events can for
example not be gathered by observation.
The survey method, on the other hand, aims at questioning people and recording the
their responses for analysis. According to Cooper and Emory (1995:269) surveys are
usually more efficient and economical than observation. The great strength of
questioning as a primary data collecting technique is its versatility. Abstract
information of all types can only be gathered by questioning respondents.
According to Van der Merwe (1996:289) the survey method has the following
characteristics:
It can accommodate any research goal, but are usually descriptive or
explanatory.
It is usually representative.
It is either longitudinal or cross-sectional.
It is usually independent of a specific context (groups are statistically
composed by means of sampling.)
Valuable information about opinions, attitudes, intentions and expectations that is

seldom available through other gathering methods can be obtained through
questioning. The shortcomings of questioning are based on the fact that the quality of
the information secured depends heavily on the ability and willingness of respondents
to co-operate. Since abstract information is required relating to attitudes and
perceptions for this research study, the survey method will be used to gather the
primary data.
Questioning can be done in different ways including personal interviewing, telephone

interviewing or mail surveys (Cooper, Emory, 1995: 270). Personal interviewing
requires a trained interviewer, interviewing the sample people. Telephone
interviewing is conducted by telephone where the mail survey uses mailed
questionnaires to the sample group for completion.
51
Some advantages and disadvantages of the different survey methods will be

highlighted in Table 3.1 from Cooper & Emory (1995: 287).
Table 3.1
Advantages and disadvantages of different survey methods
Survey method
Advantages
Disadvantages
Personal
Good co-operation from
High costs.
respondents can be achieved.
Interviewers need to be
interviewing
interviewer and respondent.
trained
Active interaction between
Potentially more information

obtainable, interviewer probes
accessibility.
deeper.
Telephone
interviewing
Lower costs as compared to
Easy coverage of
Fewer trained interviewers.

Completion times faster.
Interview length limited by

time.
respondents.
Lower response rate compared

to personal interviewing.
geographically dispersed
Difficulties with geographical

dispersion of respondents.
personal interviewing.
More difficult respondent
Not all target groups are

reachable by telephone.
Graphics or illustrations can

not be used.
Mail surveys
Low demand on staff
Trained interviewers not
Most cost effective.

Wide geographic coverage.
Questionnaires must be kept

short and simple.
Interviewer unable to
intervene.
needed.
Low response rate.
More anonymous.
Inaccessible respondents
Accurate mailing lists

important.
contacted easily.
In the light of the mail survey offering the best advantages for the type of information
required for the study, it would be used to gather the data. Due to the small sample
size, consisting of a selected group of optometrists in Gauteng, questionnaires will be
mailed and/or hand delivered to each person. The questionnaire will now be discussed
in detail.
52
3.6
Questionnaire
The questionnaire is trimensional consisting of Section A, which requests certain

demographic information and Section Band C, which contains the specific research
questions. Appendix A contains the full questionnaire.
Section A requests demographic information including age, gender, practise location,

practise age, size of client base and number of years in practise. This data will be used
to determine how attitudes and experiences differ according to certain demographic
groupings.
It is however important to have a measuring tool to measure abstract concepts. A
categorical (rating) scale will be used to measure the responses. Numbers will be
assigned to opinions and attitudes.
The decision to use a categorical scale rather than a comparative scale was based on
the fact that respondents will be required to score some objects without direct
reference to other objects. Since respondents are asked to choose the object each
favours or solution each would prefer, preference measuring was used. A 5-point
Likert intensity scale was chosen as scale design for the questionnaire due to the
following reasons:
It is relatively easy to construct.
It is easy to use.
It has good discriminating ability.
The scale consists of statements expressing either a favourable or unfavourable

attitude towards the object of interest. Respondents are required to agree or disagree
with each statement. Each response is assigned a numerical score to reflect its degree
of attitude favourable ness. An example is given below:
53
Offering the latest technology products will ensure gaining competitive advantage.
1
nglyagree
Agree
Undecided
Disagree
Strongly disagree
The numbers indicate the value to be assigned to each possible answer with 1
indicating the highest degree of acceptance of the statement and 5 the most
unfavourable.
Developing the Likert scale firstly requires the collection a large number of
statements that meet two criteria (Cooper, Emory, 1995:180):
Each statement is believed to be relevant to the attitude being studied.

Each is believed to reflect a favourable or unfavourable position on that
attitude.
In order to safeguard the questionnaire against response-set bias some statements are
worded favourably while some are worded unfavourable. Unfavourable statements are
indicated by (-) after the statement.
Background theory, as discussed in chapters 1 and 2 was used to derive the

statements. The different theories on competitive advantage, as set out in chapter 2,
were each used to derive a number of statements.
3.7
Question Groups
In order to derive meaningful and manipulative information from the questionnaire, it

was decided to broadly categorise the questions into four groups of factors hat
contribute to competitive advantage. The groups are product and service, market,
technology and people.
54
3.7.1
Product and Service
The questions in this category test the respondents on their perception of how
products and services influence the gaining and sustaining of a competitive advantage
in the optometric practice.
2. There are different ways of achieving competitive advantage in an optometric

practise in South Africa.
3. An optometrist should not only focus on one competitive strategy. (-)
4. Offering products at the lowest price does not ensure a sustainable competitive
advantage over rivals. (-)
5. It is easy to copy the low prices of another optometrist.
7. Low cost products do not imply inferior quality products. (-)
9. It is easy to copy the products of other optometrists.
12. Specialising in a certain field of optometry (e.g. sports vision or low vision) will
not ensure the optometrist of gaining competitive advantage over rivals. (-)
17. Integrating the existing practise for example with a surfacing lab on the premises
wi11lead to the practise growing.
20. Optometry can not be classified as a service only. (-)
21. Optometry can be classified as a service-product package.
22. The service-product package in optometry has a complex nature in terms of the
mixture of tangible (e.g. glasses) and intangible goods (e.g. service).
23. The service experience in optometry has no longevity once it has been
completed.(-)
24. Multiple client interaction makes it is difficult to standardise services offered in
the optometry practice.
25. The atmosphere the client experience in the optometric practice does not
determine his/her perception about the service. (-)
28. Optometrists are not selling multiple service experiences to clients. (-)
29. Clients base their perception of the service in an optometric practice on all the
interactions experienced in the practice.
30. Clients do not recognise the product and service in the optometric practice as
separate entities. (-)
55
38. The optometry practice must use multiple competencies (e.g. offering low cost
products as well as specialising in low vision) to build sustainable competitive
advantage.
39. The added value customers seek determines the competitive approach of the
optometrist.
45. Offering products at low cost is not the only strategy for gaining competitive
advantage in the optometric practice. (-)
46. Offering value-for-money products is the only strategy for gaining competitive
advantage in the optometric practice.
47. Offering exceptional service is not the only strategy for gaining competitive
advantage in the optometric practice. (-)
48. Offering unique/high quality products is the only strategy for gaining competitive
49. Offering high technology products (e.g. lenses, frames or contact lenses) does not
lead to the optometrist gaining a competitive advantage. (-)
50. Offering exceptional service to clients leads to the optometrist gaining competitive
advantage.
51. Offering products or services with additional add-on benefits to the client (e.g.
receiving free health club membership with every purchase over a certain amount)
leads to the optometrist gaining a competitive advantage.
52. Offering products with performance enhancing features (e.g. anti-reflection
coatings) will not lead to the optometrist being the preferred provider of the client.
(-)
53. Outperforming rivals through unique capabilities (e.g. offering glasses within one
hour from testing) will ensure that the optometrist will be the preferred provider of
the client.
54. Offering unique products (e.g. contact lenses or frames) will not ensure that the
optometrist will be the preferred provider of the customer. (-)
55. Offering products similar to competitors but at a lower cost will not ensure that
the optometrist will be the preferred provider of the customer. (-)
56
3.7.2. Market
Questions in this category test the perception of respondents on how the market
influences the gaining and sustaining of a competitive advantage in the optometric
practice with reference to the client.
1. Globalisation impacts on the competitive environment of optometry in South
Africa.
6. Offering products at the lowest prices is successful if clients are price sensitive.
8. Offering products at the lowest price does not attract low-income consumers only.
(-)
13. Supplying low cost goods to a large number of clients will ensure the optometrist
of gaining a competitive advantage.
14. It is not important that the optometrist understands what the clients perceive as
being value-for-money products. (-)
15. The optometrist must understand what drives the cost in his/her practise in order
to offer products at low cost.
18. Practices should grow through investing in industries totally unrelated to
optometry (e.g. restaurant industry or property market).
19. The large client base of the optometrists offering low cost products does not make
it difficult for competitors to enter that market. (-)
32. It is expensive for the optometric practice to defend its current competitive
position.
33. The threat of attacks from rival optometrists on your client base can never be
eliminated completely. (-)
34. Using economy of scale like for example doing great volumes of contact lens
sales, is an effective defence against attacks from other optometrists on the client
base.
35. Focusing on brand identity in the optometric practice is not an effective defence
against attacks from other optometrists on the client base. (-)
36. Continued signalling that the practice will retaliate against attacks of rival
optometrists on the client base is an effective defence strategy.
37. The biggest pitfall of a defensive strategy is that optometrists focus too much on
short-term profitability.
57
40. Opening of new stores/practises is not the main force influencing competition in
optometry. (-)
41. The main force impacting on competition in optometry is bargaining power of
optometristslbuyer groups.
42. Rivalry among existing optometrists is not the main force affecting competition in
optometry. (-)
43. The main force influencing competition in optometry is the bargaining power of
suppliers.
44. The threat of substitute products or services is not the main force impacting on
competition in optometry. (-)
56. Growing and expanding the existing optometric practise is accomplished by
opening new practises.
57. Growing and expanding the existing optometric practice is not accomplished by
offering services or products to more customers in the existing area of practise. (-)
3.7.3. Technology
technology influences the gaining and sustaining of a competitive advantage in the
optometric practice.
10. Clients will pay a premium price for high quality products.
11. Clients do not perceive high prices as a sign of inherent product quality. (-)
16. The optometrist offering products at low cost to the client need to focus on saving
costs in his/her practice.
26. The optometrist should not base his/her competitive strategy on the service
expectations of the customers. (-)
38. Competitive success can be gained through people.
58. Offering different quality products to clients will not ensure the existing
optometric practice to grow and expand. (-)
59. Competitive advantage based on unique attributes (e.g. low vision specialisation)
is easily copied by competitors.
60. Competitive advantage based on unique attributes is lost due the attributes
becoming less important to the clients.
58
61. Multiple sources of uniqueness (e.g. low vision as well as pediatric specialisation)
do not lead to sustainable competitive. (-)
62. Competitive advantage based on specialised products is not sustainable. (-)
63. Competitive advantage based on specialised services (e.g. low vision)
IS
sustainable.
64. If the specialised services provide in the needs of clients the competitive
advantage is sustainable.
3.7.4. Employees
employees in the practise influences the gaining and sustaining of a competitive
65. Adequate skilled personnel are not essential in order to gain competitive success
through people. (-)
66. Managing people effectively in the optometric practise does not result in
competitive advantage being as visible as other more tangible sources (e.g. low
prices). (-)
67. Employment security plays an important role in managing people towards
68. Selective staff recruiting, for the optometry practice, does not play an important
role in managing people towards competitive advantage. (-)
69. High wages paid to employees plays an important role in managing people
towards competitive advantage.
70. Incentive pay paid to employees does not play an important role in managing
people towards competitive advantage. (-)
71. Empowering the work force plays an important role in managing people towards
72. Training and skills development of staff in the optometry practise does not play an
important role in managing people towards competitive advantage. (-)
73. Managing people as a source of competitive advantage is more sustainable than
other sources of competitive advantage.
59
3.8
Coding of the questionnaire
The numerical response from each question is coded according to a coding matrix.
Consider question 3 of the questionnaire (Section B):
3. An optometrist should focus on one competitive strategy only.
Grong~ agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
3
Score: 0
4
Score: -1
Score: -2
The response will be coded as follow:
1
Score: 2
2
Score: 1
In the case where the respondent marked "Disagree", meaning that he/she does not
agree that an optometrist should use only competitive strategy, the 4 would be coded
as -1. The coded response to question 3 would mean that the respondent disagrees
with Porter's theory (1990:38) on sustainability of competitive advantage through a
low-cost provider strategy.
Consider an unfavourable question for example question 4 of the questionnaire

(Section B):
advantage over rivals. (-)
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
3
Score: 0
4
Score: -1
sco;e:-2
The response would be coded as follow:
1
Score: 2
2
Score: 1
In the case where the respondent marked "Agree" the 2 would be coded as 1. The
coded response of 1 to question 4 would mean that the respondent agrees with Porter
(1990:38) that offering products at the lowest cost will not ensure a sustainable
60
All coded responses in each category were added and divided by the number of
responses in each group. This provides an average weighted frequency for each group.
3.9
Conclusion
This chapter discussed the methodology used to conduct the research in an attempt to
illustrate how the data was obtained. A summary of the research objectives, as
discussed in chapter 1, was given. Sample size and the research design process were
discussed. The different survey methods with some of their selected advantages and
disadvantages were described.
The mail survey was selected for the research based on its advantages over other
methods. Development of the questionnaire was described based on the different
competitive advantage theories as discussed in chapter 2.
61
CHAPTER 4
RESULTS OF STUDY
4.1
Introduction
Chapter 4 outlines the results as obtained from the questionnaires returned in the mail
survey. Factor analysis could not be performed due to the small sample size. It was
therefor decided to calculate the reliability of theoretical dimensions in order to give
meaningful insight into the responses received.
4.2
Survey response
The survey consisted of 250 questionnaires mailed to a random list of optometrists in

the greater Gauteng region, South Africa. In total, 48 questionnaires were returned via
mail, resulting in a 19.2 % response rate.
4.3
Demographic profile
The demographic information of respondents as obtained from Section A in the

questionnaire will be analysed to give more insight into the profile of the respondents.
Appendix C contains the statistical breakdown in table format for more detailed
information. Reference to the tables will be made throughout the discussion.
Figure 4.1
Nature of practice.
40 ~--'-----r-~--"--'---'_'_~
35
30
'~~_'~_-"-~_~_~-"-~'----'
125
.220
~ 15
10
5
o
Pa1nerstlp
Privcie Cm'penJ
Nature d practice
63
Interesting infonnation about the respondents can be derived from the demographic
infonnation in Section A of the questionnaire. Sole owners makes up a majority
(70,8%) of all respondents (see Figure 4.1) with 16,7 % of practices in the sample
being part of a partnership.
Figure 4.2
40
.a
~
20
o
1
2t04
5t010
>1
Optometrists
From Figure 4.2 it is clear that the majority ofpractices surveyed in the study employs
only one optometrist. Although the relationship between the sole owners and practices
employing only one optometrist was not investigated the graphical representation
suggests a possible correlation and might warrant further investigation. Practices
employing 2 to 4 optometrists represent the second biggest group.
Figure 4.3
Number of practices owned.
2 t04
11 to 15
> 15
Practices/Outlets
Figure 4.3 shows a similar graphical representation than that of Figure 4.1 and 4.2
with the majority (64,6%) of respondents owning only one optometric outlet.
64
Respondents owning between 2 and 4 outlets totalled 31,3% while the remaining
4,2% evenly divided between respondents owning 11 to 15 and those with more than
15 outlets.
Figure 4.4
25
r-~--c-~~-""""",'-:'"':~.~"""""'~-~-:-:
20 +--..,.:----;--:----;-
= 15 +-~---'--:--.:...,-,----':-'-,,----'-----':...-:.-.
~
~ 10 +-..:..+-c..:---"-'----'-~~-.:....,-
5 +---"
o +----
--"-,-
2 to4
5 to 10
11 to 15
> 15
Years
A large percentage of practices (43.8 %) have been in existence for more than 15
years (see Figure 4.4). This stands in sharp contrast with the next group of pmctices
existing between 5 and 10 years which made up 27.1 % of the total. It is surprising
that so many practices in a historically old and well-populated area like Gauteng has
only been in existence for between 5 and 10 years.
Figure 4.5
Number of complete years optometrist has been practising.
,----------------~~--~----
2 to 4
5tol0
l1to15
> 15
Years
'-----------
--------------
From Figure 4.5 it is clear that the majority of respondents have been practising for
longer than 15 years (39,6%) or between 5 to 10 years (37,5%). Seeing that only
shareholders and/or owners of practices were eligible to respond on the questionnaire
65
it seems that a small percentage of optometrists in the sample have acquired share
holding in the initial 2 to 4 years ofpractice.
Figure 4.6
Number of complete years as owner or shareholder of an

optometric practise.
2 to 4
5to10
11to15
> 15
Years
The majority of respondents (33,3%) have had share holding/ownership of an

optometric practice for more than 15 years in contrast with the 4,2% that have only
been share holders for one year (see Figure 4.6).
Figure 4.7
25 - . - - - ' - - - - - - -
20
15
10
o
Shopping
Centre
Private Shop
Private House Medical Centre
Practice Position
Almost half of the respondents in the survey are practising in shopping centres
(45,8%) which might be a strong indication that optometrists are increasingly getting
66
exposure in the retail environment (see Figure 4.7). Only 27,1% of respondents are
pmctising in private shops with the remainder of respondents practising either from
private homes, medical centres or other locations.
Figure 4.8
16
,.----"..---"..-------.~--.-'""-.---
14 -t----------'
12
+---~-,-------:
= 108
.2
6
4
2
o
4001 to 8000
Oto 4000
8001 to 12 000
12001 to 16 000
> 16000
Size of Client Base

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _- - - - J
The following factor is testing the size of the client base of the practice as formulated
in the queation "What is the approximate size of your client base?". Figure 4.8 shows
that 29,2% of respondents have a current database size of between 4001 and 8000.
Database sizes of 8001 to 12 000 and 0 to 4000 respectively, represent 20,8% of
practices in the sample. Larger database figures of 12001 to 16000 represents 10,4%
while 16,7% of respondents reporting databases of larger than 16 000 clients.
Figure 4.9
20,..-:------....,..,...--
15
.a=
10
ftI
>
o
20 to 30
31 to 40
41 to 50
51 to 60
> 61
Age
Figure 4.9 shows the age profile of respondents taking part in the study. 22,9% of
respondents are between 20 and 30 years of age while 25% are between 41 and 50
67
years. Most respondents (33,3%) however are between the age of 31 and 40, while
12,5% of respondents are between 51 and 60 years. The smallest group is respondents
older than 61 years of age making up 6,3% of the sample.
Figure 4.10
40
-r--.,...,..-.'----~
30
20
10
o
Female
Male
Gender
Gender distribution is illustrated in Figure 4.10. Male respondents represents the

biggest percentage with 68,8% while female respondents only representing 31,3% of
all respondents.
4.4
Questionnaire frequencies
The response frequencies ofthe individual questions in Category B and Category C of

the questionnaire are displayed in Appendix e (see Table ell and e12). Response
frequencies of the individual questions of the four dimensions are displayed in Figure
4.11, 4.13, 4.15 and 4.17 of this chapter. For ease of interpretation the five
questionnaire categories were combined into three new categories consisting of
Positive ("Strongly Agree" and "Agree"), Neutral ("Undecided") and Negative
("Strongly Disagree" and "Disagree"). The visual representation of the new categories
can be seen in Figures 4.12, 4.14, 4.16 and 4.18. It has to be taken into account that
questions were put in positive and negative modality and a negative response to a
negative question might that the respondent agreed with the statement made. A brief
overview of only the most significant fmdings in each dimension will be given.
68
4.4.1
Product and Service
The responses on questions relating to Product and Service can be summarised as

follows.
Figure 4.11
Product and Service - Individual Question Frequencies
70
>
60
50
CD
:::I 40
C"
e30
LL.
20
10
o
q9 q12 q17 q20 q21 q22 q23 q24 q25 q28 q29 q30 q38 q39 q45 q46 q47 q48 q49 q50 q51 q52 q53
Questions
l!Strongly ~
Ii))
~ree
0 Undecided 0 Disagree
Strongly Disagree
For the ease of interpretation the five questionnaire categories are reduced to three
categories Positive (Strongly Agree and Agree), Neutral (Undecided) and Negative
(Strongly Disagree and Disagree). The responses to the grouped frequencies relating
to Product and Service can be summarised as follows.
Figure 4.12
100% TII!J.,...,...,....,..
~~~~
~_.r_.r,,', lrMIl~r'"ll~~rc,\,., r-1Ir:-.r_r. .I,.......__"......__~...,
50% +III-,fit__;-II__.,..
'-'IIJ--'Ilf.~::II::::II::
"IIt'_ w"'II'r-IIJ4-IIi~l-'IIf-"II""~
:;L(t
0% -j-IIilIYlilIYlilI-r-'JlII.,..m.,..m.,..m.,..m.,..m.,..m.,.-..,.-..,.-.r--r--reL,..m.;,.:u..~"-".JiIL;.JiIL;..m.,..m.,'-"".IIIIL,-..I!IL.r--""JIII,-I!iL{
Questions
III Positive. Neutral Negative I
69
Question 4 shows 83,3% of respondents agreeing that offering products at the lowest
price will not ensure a sustainable competitive advantage (see Figure 4.11 and
Appendix e, Table ell). The response is reassuring and might indicate that the
majority of practitioners value other sources of competitive advantage. It is especially
relevant due to the optometric industry being strongly guided by medical ethics. If
practitioners do indeed focus on sources other than low price, clients might be dealt
with more ethically. A small percentage of respondents (10,4%) disagree with the
statement and this might be indicative that some practitioners still believe that low
prices are important to draw clientele. Due to the large retail optometrists controlling
more and more of the market place it is possible that the response is skewed by the
single practitioners experiencing the squeeze in profit margins due to retail chains
undercutting prices.
The response frequencies of question 5 are insightful, indicating 33,3% of all

respondents disagreeing that it is easy to copy the low prices of another optometrist in
contrast with 52,1 % of respondents agreeing with the statement. Taking into
consideration that the majority of respondents are sole owners (see Figure 4.1) of
between 1 and 4 practices (see Figure 4.3) it can be argued that these practitioners
might be under pressure from the large retail optometrists in the retail environment.
The answer might be hidden in the response on question 9 where 66,7% of
respondents agreed that it is easy to copy the products of other optometrists. Larger
optometric groups might benefit from economy of scale and thus offer products
similar to that of their competition at a lower price. Smaller practitioners might thus
be able to copy products but not match price.
Question 12 shows that 56,3% of respondents do not believe that specialisation into a
certain field of optometry will ensure that an optometrist gains competitive advantage.
It is alarming to notice the negative sentiment towards specialising and it may cause
serious problems for the profession if a culture of continual education is not regarded
as important. Practitioners need to value continuing improvement in the standards of
practice in order to keep up with new developments and to offer world class service in
order to gain competitive advantage. With more and more competition in the
optometric industry and the current state of the South Mrican economy it may be
interpreted that the respondents perceive no additional monetary value in
70
specialisation. Respondents might be content to work in the retail environment

making use of minimal skill levels instead of developing their expertise to its full
potential.
A very strong positive response is gIven to the statement in question 21 that

optometry is a service-product package with 93,8% agreeing. Similarly the majority
of respondents (93,8%) agree that the service-product package in optometry has a
complex nature (see Figure 4.11, question 22). Question 28 indicated that 95,7% of
respondents agree with the statement that optometrists sell multiple service
experiences. It seems that the opinion of practitioners in the sample as to the nature of
the services rendered is almost uniform.
The majority of respondents disagree (68,8%) that the service experience has no
lasting material being (see Figure 4.11, question 23). This contrasts strongly with
theory (Kotler, 1997:468) which states that services are perishable, but encouraging
because it indicates that the respondents might value the services they render as
having long term impact on client perception.
Respondents are divided about the difficulty of standardising the multiple-interaction

service experience with 45,8% agreeing, 18,8% being undecided and 35,4%
disagreeing (see Figure 4.11, question 24). The response possibly indicates that not all
optometrists might perceive differentiation based upon service excellence as a
competitive strategy. This apparent incongruency is not portrayed by the response on
question 50 where 91,7% of respondents agree that offering exceptional service leads
to the optometrist gaining a competitive advantage.
Question 29 evoked an unanimous positive response with 100% of respondents

agreeing that clients base their perception of the service upon the interactions
experienced in the optometric practice (see Figure 4.11, question 29). Respondents all
recognise the importance of the perceived service the client experiences in their
practices.
The majority of respondents (68,8%) agrees with question 39 that the added value
customers seek determine the competitive approach of the optometrist. The response
71
is especially significant because it indicates that consumer demands are valued as a

competitive barometer.
Questions 45 to 49 reveal that respondents agree that no single strategy might be
successful in gaining a competitive advantage (see Figure 4.11, Appendix e - Table
e12).
Response to question 51 indicates divided opinions with 31,1 % of respondents

agreeing that offering products or services with additional add-on benefits will lead to
the optometrist gaining a competitive advantage. 39,6% of respondents are undecided
and 29,2% disagrees with the statement. Especially in the light of the large undecided
percentage it is possible that respondents do not fully understand the statement.
From Figure 4.12 it is evident that respondents have diverse opinions on questions 52
to 55, with relatively large "Undecided" percentages. Response percentages of
"Positive" and ''Negative'' are also relatively even (see Appendix e - Table e12).
4.4.2 Market
The responses on questions relating to the Market dimension can be summarised as
follows.
Figure 4.13
Q8 q13 q14 q15 q18 q19 q32 q33 q34 q35 q36 q37 q40 q41
Q.aestions
72
The responses to the grouped frequencies relating to the Market can be summarised as
follows.
Figure 4.14
-,..,-.
""-',,""-''''''':
,'"
,.;..,
f.'....
~. ~
x
"f
1 6
-c-;
-::
c...:
/,
""""
'
:
~~ii;=i~~~:i
~
~.
J .:;.
"
8 13 14 15 18 19 32 33 34 35 J5 :r1 40 41 42 43 44 56 57
QIeStions
Question 1 reflects that the majority of respondents (72,9%) agree that globalisation
impacts on the competitive environment of optometry in South Africa. Due to the
devaluation of the Rand entry barriers for offshore investors in the current optometric
market place is lowered due to increased affordability to trade in South Africa.
Equally, it is getting more difficult for local practitioners to compete in the local
market due to rising costs of imported lenses and frames from other countries. On the
positive side, increased trade with tourists due to increased affordability of optometric
services and products in South Africa may give the industry a welcome financial
injection.
Question 8 reveals 87,5% of respondents agreeing that offering products at the lowest
price does not attract low-income consumers only. It may be argued that respondents
are of the opinion that lower product costs will also attract consumers from the other
income groups. In the South African economy with rising inflation and escalating
prices of luxury goods, the middle and low-income groups might also be more saving
conscious and be attracted to lower priced goods.
Question 13 reveals that respondents are divided in their views about competitive
advantage gained through supplying a large number of clients with low cost goods
73
39,6% agrees, 22,9% are undecided while 37,5% disagrees. The response might be
due to the immaturity of the optometric market as far as retail trading is concerned.
Optometry has evolved rapidly from an era where practitioners were not allowed to
have shop windows to the current stage with practices in most of the major shopping
centres. It is thus not surprising that views differ so widely.
Understanding what the client perceives to be value-for-money products proves to be

important for most respondents with 97,9% disagreeing with the statement in
questionl4. It is reassuring that consumer perception and demand is recognised as the
precursor of supply from the optometrist.
Question 18 reveals that the majority of respondents (75%) are of the opinion that
growth opportunities for the practice lies in industries totally unrelated to optometry.
The response might be indicative of the return on investment in optometry not being
as rewarding as in other industries.
Respondents seem to agree with the statement in question 32 that it is expensive to

have defensive strategies in order to maintain the current competitive positioning (see
Figure 4.13 and 4.14 as well as Appendix e - Table ell). Mixed opinions are
expressed towards brand focus and economy of scale as defensive strategies to retain
competitive positioning (Question 34 and 35, see Figure 4.13 and 4.14). An almost
even distribution of "Positive", "Neutral" and "Negative" percentages are seen in
these questions. The response to question 36 however shows 54,2% of respondents
disagreeing that continued signalling of retaliation will be an effective defensive
strategy.
Very surpnsmg is the response on question 56 to which 72.9% of respondents

answered that growth of the existing practice is not accomplished by opening new
practices. It might indicate that there is an oversupply of optometrists or it might be a
reflection of the current difficult and risky economic conditions prevailing in South
Africa. The response to question 57 shows 75% of respondents agreeing that the
expansion of their current practices would be accomplished by offering services and
products to more customers in the practice area.
74
4.4.3
Technology
The responses on questions relating to Technology can be summarised as follows.
Figure 4.15
80
60
!lr:t' 40
20
u. 0
>0
-'-7""--~-'~
q10
q11
q16
q26
q38
q58
q59
q60
q61
q62
q63
Questions
I- Strongly Ag~ee II Agree 0 Undecided II Disagree Strongly Disagree I

The responses to the grouped frequencies relating to Technology can be summarised
as follows.
Figure 4.16
100%
50%
0%
b10
b11
b16
b26
b38
c58
c59
060
061
062
063
064
Questions
l!fositive Neutral - Negative
Question 10 reveals that 81,3% of respondents agree that clients would pay a
premium price for high quality products. To question 11 respondents express diverse
opinions. The majority of respondents (45,8%) are of the opinion that high prices are
a sign of inherent product quality but a large percentage (31,3%) disagrees with the
statement while 22,9% is undecided.
Focusing on cost saving in the practice offering low cost products is deemed
important by 87,5% of respondents (see Figure 4.15 and 4.16, question 16). The
75
q64
response is not surprising as offering products at lower cost will impact negatively on
profit margins and cost saving will become important to counter this effect.
Although 66,7% of respondents agrees that offering different quality products to

clients will have a positive effect on practice growth, 20,8% is undecided and 12,5%
disagrees with the statement (see Figure 4.15 and 4.16, question 58). Most
respondents (58,3%) is of the opinion that competitive advantage based on unique
attributes is not easily copied by competitors (see Figure 4.15 and 4.16, question 59).
However, a large percentage (25%) expresses the view that unique attributes are
easily copied by competitors. In a scientific profession like optometry it might be
difficult to copy certain attributes related to practitioner skill. Copying the
technological products and services a practice can offer clients might prove to be less
difficult.
Question 60 produced an interesting result with 43,8% of respondents agreeing that

competitive advantage based on unique attributes is lost due to the attributes
becoming less important to clients. 25% of respondents were undecided over the
statement but 31,3% disagreed.
The response to question 61 shows that 54,2% of respondents are of the opinion that
multiple sources of uniqueness can lead to sustained competitive advantage.
Interestingly, 29,2% of respondents disagrees with the statement and 16,7% are
undecided. A similar response is given to question 62 with 54,2% of respondents
agreeing that competitive advantage based on specialised products is sustainable,
31,3% disagrees and 14,6% is undecided.
It is interesting to note that in comparison to question 62, a higher percentage of
respondents (66,7%) agrees that competitive advantage based on specialised services

is sustainable (see Figure 4.15 and 4.16, question 63). This might be interpreted that
respondents value the specialised services as a more sustainable source of competitive
advantage than products. Question 64 also reveals 72,9% of respondents agreeing that
competitive advantage based on specialised services that provide in the needs of
clients will be sustainable.
76
4.4.4 Employee
The responses on questions relating to the Employee dimension can be summarised as
follows.
Employees - Individual Question Frequencies
Figure 4.17
q65
q66
q67
q68
q70
q69
q72
q71
Questions
I-strongly Agree &lIAgree [] Undecided Ell Disagree - Strongly Disagree I
The responses to the grouped frequencies relating to the Employee dimension can be
summarised as follows.
Employees - Grouped Frequencies
Figure 4.18
100%
50%
0%
065
066
067
068
069
e70
c71
c72
c73
Questions
[ifOSitive - Neutral - Negative
Questions 65 to 73 give very encouraging insight into the attitude of respondents

towards employees and the importance of their role in delivering a service that may
lead to gaining competitive advantage (see Figure 4.17, Figure 4.18 and Appendix c
Table c12). Responses on all the questions show respondents valuing the effects of
aspects such as job security, training, staff empowerment and skill development on
the quest for competitive superiority.
77
q73
Question 66 reveals an interesting response with 70,8% of respondents being of the

opinion that managing people effectively in the optometric practice leads to a tangible
To questions 65 and 68 respondents agree (89,6% and 91,7% respectively) with the
statements, emphasising the importance of having adequately skilled personnel as
well as using selective staff recruiting in order to gain competitive advantage through
employees.
A very interesting response to question 69 reveals the controversial nature of high

wages in the management of employees towards competitive superiority. One third
(33,3%) of respondents are unsure if high wages plays an important role, 31,3%
agrees that it does and 35,4% disagrees. However, if one looks at question 70, 66,7%
of respondents agrees that incentive pay to employees play an important role in
managing people towards competitive advantage.
To questions 71 and 72 respondents agree (70,8% and 85,4% respectively) that

empowering the work force through training and skills development play an important
role in the management of employees towards competitive advantage. This stand in
sharp contrast the response on question 12 of the Product and Service dimension (see
Figure 4.12) where practitioners does not value continued education through
specialisation as important to gain competitive advantage. It might be possible that
practitioners are valuing employee development to be more important source of
competitive advantage than optometrist specialisation.
Question 73 shows 60,4% of respondents agreeing with the statement that

management of employees as a source of competitive advantage are more sustainable
than other sources. It is surprising that 25% of respondents are undecided over the
statement and 14,6% disagrees to the importance of employee management towards
78
4.5
Reliability analysis
Due to the relatively small size of the sample it was not possible to perform principal
factor analysis. As stated in chapter 2 it was decided to broadly categorise the
questions into four dimensions that contribute to competitive advantage. This is done
for the sake of deriving reliable dimensions by reducing the questions in order to
compare the groups. The four dimensions are:
Product and Service.
Market.
Technology.
Employee.
All the factors shows adequate alpha reliability (see Table 4.1) and the data can be
regarded as reliable in order to perform statistical analysis. The Market dimension had
an alpha reliability of 0.69 and although this is smaller than 0.70 it is considered to be
reliable due to the small sample size.
Table 4.1
Reliability Analysis
Scale (Alpha - u)
-
Product and Service
.7477
Market
.6932
Technology
.7216
Employee
.7523
4.6
Normal distribution
To determine whether there are differences among respondents according to the four
dimensions a One-Sample Kolmogorov-Smirnov Test was performed (see Table 4.2).
A value smaller than 0.05 indicates a statistical significant difference between groups.
Values greater than 0.05 implies that groups are more positive with regard to the
dimensions indicated.
79
Table 4.2
Normal Distribution Analysis
Kolmogorov-Smimov Z
Asymp Sig (2-talled)
Product and Service
.612
.848
Market
.711
.693
Technology
.770
.594
Employee
1.065
.207
-
Table 4.2 indicates that the different groups showed no significant difference in
opinion over the four dimensions. In fact, the groups tend to agree on the dimensions
to a high degree.
4.7
Inter-group differences
Due to the small sample size and the low response rate, it was decided that the
different groupings of respondents, as put forward in the demographic section of the
questionnaire (Section A), would be reduced to two significant groupings per
category. The frequencies of questions 1 to 10 (Section A) of the questionnaire are
used as a guideline. Question 2 for example, indicates 64.6% of practices having one
optometrist working. The practices with a sole optometrist would thus be compared
with the rest of the practices having more than one optometrist (grouped together) as
far as their attitude towards the four factors, product and service, market, technology
and people is concerned.
Similarly the groupings in question 3 to 10 are reduced to two significant groups with
the highest scoring category compared with the rest of the categories. The analysis is
performed using the T-test due to the data showing normal distribution (see Table
D1). Appendix D contains the detailed information in table format. The different
groupings show similar attitudes to the four factors with some exceptions.
80
4.7.1 Market
The single optometrist differs in opinion to the practices with more than one
optometrist as far as the market factor is concerned (see Table D2.1 and Table D2.2).
The modality of the questions for the factor Market is positive, indicating that
optometric practices with more than one optometrist, does not value the market factor
to be as important in gaining competitive advantage as the single practitioners.
4.7.2 Product and Service
Respondents with practices existing for up to 10 years show a significantly more

negative response towards the importance of Product and Service in gaining
competitive advantage than respondents with practices existing for longer than 10
years (see Appendix D, Table D4.1 and D4.2). Similarly, respondents who have been
practising for longer than 10 years show a significantly more positive response than
respondents practising for less than 10 years as far as the effect Product and Service
has on competitive advantage (see Appendix D, Table D5.1 and D5.2).
A significant difference is revealed in Table D5.1 (Appendix D) with practitioners

that have been shareholders of practices for more than ten years expressing a more
favourable attitude towards the effect Product and Service. Practitioners that have
been shareholders/owners for less than 10 years show a more negative attitude.
There are also a significant difference between the age groups "20 to 40" and "over
40" with regards to the Product and Service factor.
Surprisingly there are no significant differences between optometrists in shopping

centres as compared to other locations with regards to their views on the four factors.
Gender does not indicate any significant differences in opinion between the four
factors.
81
4.7.3 Dimension Frequencies
Standardised Dimension Frequencies
Figure 4.19
5
4
:B:::l 3
iii
> 2
1
0
Product and service
Technology
Market
Employees
Variables
~Oduct and
service -Market -Technology .EmPIOyeei]
Figure 4.18 indicates the standardised mean values of the four dimensions based on
the responses on the questions of Section B and Section C of the questionnaire.
The Employee dimension is rated the highest, Product-and-Service is tied with

Technology and Market scores the lowest. It is encouraging to see that most
employees agree with the statements surrounding gaining a competitive advantage
through employees. This is particularly significant in South Africa with high levels of
unemployment and might indicate that practitioners value the input of their employees
in gaining a competitive advantage. This in turn can lead to skill development as
money might be invested as part of an effort to continuously improve the workforce.
4.5
Conclusion
Interesting demographic information were obtained from Section A of the

questionnaire. This together with the insightful information obtained from Section B
and C of the questionnaire will be discussed in great detail in Chapter 5.
82
CHAPTERS
CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
This chapter will contain the conclusion of the results as obtained from the dimension
analysis. It will try to explain the results and give some insight into the emerging
tendencies on which recommendations will be based.
5.2 Conclusions
Especially strong positive responses are given to statements surrounding the Product
and-Service dimension. The majority of respondents agrees to both optometry being a
service-product package and to its complex nature (see Figure 4.11, question 21 and
22). Most respondents also agree that optometrists sell multiple service experiences
while all respondents unanimously agree that clients base their perception of the
service upon the interactions experienced in the optometric practice (see Figure 4.11,
question 29). The majority of respondents also recognise the important role the
perceived in-practice service experience has on competitive advantage. Lastly, most
respondents agree that offering exceptional service leads to the optometrist gaining a
competitive advantage. The above mentioned response profiles might indicate that
respondents in most practices realise the important role Product-and-Service aspects
play in the quest to gain and sustain competitive advantage. It is encouraging to see
that practitioners value their services and the Product-and-Service packages they
provide highly because it will result in clients receiving high quality eye-care.
Responses to the Market dimension show that the majority of respondents agreed to
globalisation impacting on their optometry practices. Respondents also agree that
offering products at the lowest price does not only attract low-income consumers.
However, a mixed response is given to the effect that mass supply of low cost goods
will have on gaining competitive advantage. A high level of conformity around the
importance of client perception about value-for-money products as a driving force in
gaining and sustaining competitive advantage is also expressed.
83
It is interesting to note that a large percentage of respondents are of the opinion that
practice growth opportunity lies in unrelated industries. The majority of respondents

are also of the opinion that growing the existing practice is not accomplished by
opening new practices (see Figure 4.14, question 56). It might be a reflection of the
difficult and risky economic conditions currently prevailing in South Africa.
Otherwise it might be indicative of the highly competitive nature of the optometric
environment at present. Similarly, many respondents are of the opinion that growth
opportunities for the practice lie in industries totally unrelated to optometry (see
Figure 4.14, question 18). If this response is interpreted as an indication of a low
return on investment in optometry, practitioners might rather invest money in other
industries instead of reinvesting it in their practices. If this is indeed the case, the
industry might later face severe problems like technologically outdated equipment,
poor staff training and resultant low service levels.
Respondents seem to agree that defensive strategies to maintain current competitive

positioning are expensive. However, respondents express mixed opinions towards the
importance brand focus and economy of scale will have as defensive strategies to
retain competitive positioning. One explanation might be that optometry has evolved
from a profession with closed windows into the current retail situation. Practitioners
might still find it difficult to separate their retail and ethical thinking. The practitioner
is responsible for the visual well being of his/her clients but at the same time need to
be competitive with product and service prices in order to survive in the high cost
environment of the shopping centres. More research might be needed to explain the
response fully.
The Technology dimension reveals the vast majority of respondents agreeing that
clients will pay a premium price for high quality products. Response to the statement
that high prices are an indication of inherent product quality is divided. However, the
majority of respondents agree that offering different quality products to clients will
have a positive effect on practice growth (see Figure 4.15 and 4.16, question 58).
Focusing on cost saving in the practice offering low cost products is deemed
important by most of respondents (see Figure 4.15 and 4.16, question 16).
Practitioners give uniform responses to the importance of managing cost effectively in
order to gain competitive advantage. It can thus be argued that respondents are
84
sensitive to the cost drivers in their practices and aware of the effect it has on their
competitive ability in the marketplace. This is especially significant because no
practice can be managed on a sustainable basis without critical cost management. The
practitioner managing his/her costs more effectively can thus pass the saving on to
clients or reinvest the money into the practice and by so doing can gain competitive
advantage over rivals.
The response to the effect of unique attributes on competitive advantage gives varying
results. Although most respondents are of the opinion that competitive advantage
based on unique attributes is not easily copied by competitors a quarter of respondents
disagrees (see Figure 4.15 and 4.16, question 59). Similar differences in opinion are
expressed towards the sustainability of unique attributes as a source of competitive
advantage. Although a third of respondents is of the opinion that the competitive
advantage based on unique attributes erodes due to the attributes becoming less
important to clients, almost three-quarters of respondents thought this not to be the
case.
More than half of the respondents are of the opinion that sustainable competitive
advantage can be obtained through multiple sources of uniqueness or offering
specialised products. Even more respondents are of the opinion that competitive
advantage based on specialised services is sustainable (see Figure 4.15 and 4.16,
question 63). It is also significant to note that respondents agree that competitive
advantage will be sustainable if the specialised services offered provide in the needs
of clients. Respondents thus portray a high level of conformity towards the important
role differentiation play in gaining and sustaining competitive advantage in the
practice.
Although the least number of questions in the questionnaire are devoted to the
Employee dimension, it yields insightful results as far as the attitude of respondents
towards employees. It also sheds light on the degree to which respondents value the
importance of employees in delivering a service that may lead to gaining competitive
advantage (see Figure 4.17, Figure 4.18 and Appendix C - Table C12). Responses on
all the questions show respondents valuing the effects of job security, training, staff
empowerment and skill development on the quest for competitive superiority.
85
Respondents express their opinion as to the importance of the in-practice experience

of the client and its role in gaining competitive advantage. Employees playa pivotal
role in delivering the service and to create the caring atmosphere in the practice. It is
very encouraging to see that most respondents agreed that their employees are very
important role players in creating and sustaining competitive advantage. This also
supports the views of Pfeffer (1994:56) who identified 16 Human Resource
Management practices that could enhance the competitive advantage of organisations
(see Figure 1.2). Due to the high costs in service related industries, effective employee
management might even achieve a cost leadership.
Comparing the responses of the different groupings as explained in Chapter 4 (see 4.7
Inter-group differences and Figure 4.19), surprisingly little differences among the
groupings and their orientation towards the four dimensions Market, Product-and
Service, Technology and Employees are found. The biggest difference in opinion is
between practitioners with smaller versus bigger practices and between optometrists
practising for shorter than 10 years as compared to those practising for longer than 10
years. In both instances the latter reveal a more negative response as to the effect of
Product-and-Service on competitive advantage. The marked difference in opinion
might be due to the experience of the practitioners in optometry. Those practising for
longer than 10 years might have experienced that Product-and-Service did not to
contribute markedly to gaining and sustaining competitive advantage as compared to
optometrists practising for less than 10 years. Practitioners in smaller practices might
also be of the opinion that Product-and-Service is important in gaining competitive
advantage due to a more intimate client relationship and a possible better
understanding of the needs of their clients.
Surprisingly the factor Employee shows the highest conformity in opinion among the
respondents and may show towards higher importance given to the labour force (see
4.7.2 Dimension Frequencies). The factor Market shows the least conformity among
respondents and may show the diverse approach practitioners are taking in order to
gain and sustain a competitive advantage. Practitioners might also be overlooking the
importance of consumer demand as a driving force in the market place. The response
might however be more diverse due to the geographical dispersion of respondents in
the Gauteng area with practices being exposed to different market forces.
86
5.3 Recommendations
By grouping product and service together, the study might have been limited by the
complexity of such a dimension and the varying responses it evoked among
respondents. Further research into product and service as separate dimensions might
reveal different results to the current study. The true orientation of respondents
towards the individual effect service and product has on competitive advantage might
be ascertained.
It might be wise for optometrists to pay particular attention to the market and the
needs thereof. The needs of consumers in the market will definitely dictate the aspects
optometrists need to give attention to in their practices. The factors that the consumer
values as important to be satisfied with the service experience and the product
received is the true focal points to be used in the quest for competitive advantage. Be
it through developing skills of employees, offering innovative products or selling the
cheapest product, the market will dictate the variables. Optometrists and optometric
groups might need to refocus and do proper market research in order to determine the
forces driving the consumer demand and adapt their strategies around these forces in
order to gain a competitive advantage. This will become more important in the future
due to fiercer competition and optometry increasingly moving into the retail market.
More research might be needed to determine why the majority of respondents (see
Figure 4.14, question 56) are of the opinion that growing the existing practice is not
accomplished by opening new practices. Similarly, more research might give insight
into why so many respondents are of the opinion that growth opportunities for the
practice lies in industries totally unrelated to optometry (see Figure 4.14, question 18).
Porter (1990:40) argues that competitive advantage grows out of the way
organisations organise and perform discrete activities (see Figure 2.2). Organisations
create value for their buyers through performing these activities. The ultimate value
an organisation creates is measured by the amount buyers are willing to pay for its
product or service. An organisation is profitable if this value exceeds the collective
cost of performing all the required activities. To gain competitive advantage over
rivals, organisations must either provide comparable buyer value but perform
87
activities more efficiently (lower cost) than competitors, or perform activities in a

unique way that creates greater buyer value and commands a premium price
(differentiation) (Porter, 1990:40).
Figure 5.1
The Modified Value Chain
Organisation Infrastructure
Technology Development
Procurement
Inbound
Logistics
Operations
Outbound
Marketing and
After-Sales
Logistics
Sales
Service
HUMAN RESOURCE MANAGEMENT
(Original Source: Porter, 1990:41)
It is suggested that The Value Chain of Porter (Porter, 1990:40) be modified for
service related industries like optometry where the interaction between employees and
clients play such a pivotal role in gaining and sustaining competitive advantage.
Instead of having Human Resource Management (HRM) as a support activity as
suggested by Porter (Porter, 1990:40), it need to form the foundation of how value is
added in The Value Chain (see Figure 5.1). Employees are the medium through which
value is added to the experience of clients in the optometric practice. Employees can
thus serve as a source of competitive advantage through either differentiation or low
cost strategies. It is suggested that practices that manage their Human Resource
component towards creating and sustaining competitive advantage will differentiate
themselves significantly from competitors. With optometrists and their employees
selling multiple interactions to clients it is of the utmost importance for Human
Resource Management to have a key position in the competitive strategy of
management. This is especially critical due to optometry progressively moving into
the retail environment where service excellence as well as service consistency impact
heavily on the competitiveness and the sustainability thereof.
88
Achieving competitive advantage and sustaining it requires an organisation to make

choices. If an organisation is to gain advantage, it must choose the type of competitive
advantage it seeks to attain and a scope within which it can be attained. The worst
strategic error is to be stuck in the middle, or to try simultaneously to pursue all the
strategies. This is a recipe for strategic mediocrity and below-average performance,
because pursuing all the strategies simultaneously means that an organisation is not
able to achieve any of them because of their inherent contradictions. Optometrists
whether being single practitioners or part of groups need to define their competitive
strategies in order to position themselves in the market place. With the optometric
industry going through a rapid transition from closed window trading to full retail
status, many optometrists might find themselves practising as so called middle of the
road optometrists without a competitive advantage over rivals in the immediate
market. Optometrists need to change their frame of reference and start thinking along
competitive routes in the retail market. More importantly, employees need to be part
of the process to gain and sustain competitive advantage. Management must ensure
that employees buy into the vision of the practice or group of practices in order to add
value to customers and ultimately create competitive advantage. Furthermore there
need to be continuous reinforcement of the vision through two-way communication as
well as changes in strategy to sustain the competitive advantage in the dynamic
competitive environment.
Lastly it is suggested that research be conducted on a national level to determine if the

opinions expressed by respondents in this study representing the greater Gauteng
region, could be seen as representative of the entire South Mrican optometric market.
89
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Organisation, Journal ofMarketing, July 1995 v59 n3 p63.
40. Stock, R.S., Lambert, D.M., Strategic Logistics Management, McGraw Hill, New
York, 1993.
41. Thompson AA, Strickland AJ., Strategic Management: Concepts and Cases, Me
Graw Hill, New York, 1998.
42. Van der Merwe, H., The Research Process: Problem Statement and Research
Design, in Effective Research in the Human Sciences, ed Garbers, J.G., Van Schaik,
Pretoria, 1996.
43. Wietzman M.L. and Kruse D.L., Profit Sharing and Productivity, in Blinder AS.
(ed), Paying for Productivity: A Look at the Evidence (Washington, DC: The
Brookings Institution, 1990).
44. William B. Werther and Jeffrey L. Kerr, The Shifting Sands of Competitive
Advantage, Business Horizons, May-June 1995, v38 n3 pll.
92
APPENDIX A
QUESTIONNAIRE
A.I
Introduction
Appendix A contains the questionnaire that was used in the mail survey for this study.
The questionnaire consists of a cover letter and three parts, namely Section A, which
requests certain demographic information. Section B and Section C contains the
specific research questions. The demographic information requested in Section A
includes the region, nature of the practice, number of practices owned, number of
optometrists in the practice, average sosio-economic status of client base and size of
the client base.
A categorical (rating) scale was chosen since respondents score some objects without
direct reference to other objects. Preference measuring is used because respondents
are asked to choose the topic each favours or solution each would prefer. A five point
Likert scale was chosen as the scale design for the questionnaire since it is relatively
easy to construct, easy to use and has good discriminating ability (Cooper, Emory,
1995:179). The scale consists of a statement that expresses either a favourable or
unfavourable attitude towards the object of interest. Respondents are asked to either
agree or disagree with each statement. Each response is given a numerical score to
reflect its degree of attitude favourableness. The numbers indicate the value to be
assigned to each possible answer with 1 indicating strong agreement with the
statement and 5 indicating strong disagreement with the statement.
93
QUESTIONNAIRE
Dear Optometrist,
Kindly note that this questionnaire is only aimed at optometrists owning a practice/s
or have share holding in one or more practices.
Ki~dly
complete the following
questionnaire. The information in this study will be used to assess the current
perception of competitive advantage in optometry. Please do not write your name on
the questionnaire. It remains anonymous. The information obtained will not be made
available to any party and will be treated strictly confidential.
The information obtained from this study will be used to complete my M.Com.
Degree. It should not take more than 10 minutes to complete the questionnaire.
Please provide your frank and honest opinion.
Klaas Alberts
Theuns Oosthuizen
M.Com student
Study leader, RAU
In order for me to analyse my findings in a meaningful and constructive way, I would

be grateful if you could provide the following demographic information.
SECTION A: DEMOGRAPIDCAL INFORMATION
1.
1
Sole owner
2.
2
Partnershi
3
Franchise
4
Private Com
5
Other
How many optometrists are employed in your practice/s?
'---_i_ _[;_t~_4_--'--_5_'t_~_=_1_o_____'Ll1t~~
>_;_5_J
__
94
3.
How many practices/outlets do you own?

1
1
4.
11t~~ >~5
2
2 to 4
How many complete years does your current practice/s exist?
11 to 15
5.
How many complete years have you been practising as an optometrist?

1
1
6.
5 to 10
How many complete years have you been the owner or shareholder of an
optometric practise?
r t~
IT
2
2
to
4
-----
7.
3
Private House
Private Sho
2
4001-8000
3
8001-12000
4
12001
,--~20_1
4--'0=.----'---_4_1_~___C.5_0---JC~~~; older I
2
__3_0_ _.;...31___
10.
5
Other
What is the approximate size of your current client base?

1
0-4000
9.
5
> 15
How would you classify the area your current practice(s) is situated in?
Sho
8.
10
11 to 15
95
SECTIONB:
IMPORTANT NOTE: For the purpose of the questionnaire, Competitive
Advantage will be defined as: The ability of an organisation to perform activities
in one or more ways that competitors cannot or will not match.
Please respond by crossing (X) the answer that most appropriately reflects your
opinion. Choose only one option for each statement.
To what extent do you agree/disagree with each of the following statements.
1. Globalisation impacts on the competitive environment of optometry in South

Africa.
2
Agree
3
Undecided
4
Disagree
StrOngl:d i s a d
2. There are different ways of achieving competitive advantage in an optometric

practise in South Africa.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
3. An optometrist should not only focus on one competitive strategy.
L-_Sl_ro_n--::.g~ty_a--::.g_re_e
~A-,--g~_e_e_--,[und:_Ci_de_d_~ __D_is_~=--r~
5
Strongly disagree
advantage over rivals.
1 2 3 4 5
Strongly
agree
Agree
Undecided --L_ _
Disagree
Strongly
disagree
L - -_ _....::::....::.---==-----_--L_
__--L.
---'='--_-'--=-...:.--_-=--__
5. It is easy to copy the low prices of another optometrist.

1
Strongly agree
Agree
3
Undecided
4
Disagree
5
Strongly disagree
6. Offering products at the lowest prices is successful if clients are price sensitive.
1
Strongly agree
2
Agree
5
Strongly disagree
3
Undecided
7. Low cost products do not imply inferior quality products.

1
Strongly agree
2
Agree
Undecided
Disagree
Strongly disagree
96
8. Offering products at the lowest price does not attract low-income consumers only.
1
3
Undecided
2
Agree
Strongly agree
-------_.
4
Disagree
Strongly disagree
4
Disagree
5
Strongly disagree
9. It is easy to copy the products of other optometrists.

1
2
Agree
Strongly agree
3
Undecided
10. Clients will pay a premium price for high quality products.
1
2
Agree
Strongly agree
3
Undecided
4
Disagree
Strongly disagree
11. Clients do not perceive high prices as a sign of inherent product quality.
2
Agree
1
Strongly agree
4
Disagree
3
Undecided
Strongly disagree
12. Specialising in a certain field of optometry (e.g. sports vision or low vision) will
not ensure the optometrist of gaining competitive advantage over rivals.
1
Strongly agree
Agree
Undecided
4
Disagree
5
Strongly disagree
13. Supplying low cost goods to a large number of clients will ensure the optometrist
of gaining a competitive advantage.
1
Strongly --=-_
agree _
2
Agree
_ _____'
- - L - _ ~
4
Disagree
3
Undecided
5
Strongly disagree
_
_'___ ___=__ _____'__ ___'___ _
___J
14. It is important that the optometrist understands what the clients perceive as being
value-for-money products.
,----------,-------,--------,-- - - - - - r - - - - - - - - - .
1 2 3
-
Undecided
_
_ _- - - ' -
Agree
~
Strongly agree
4
Disagree_ - - 1 . . .
Strongly disagree
-'
15. The optometrist must understand what drives the cost in his/her practise in order
to offer products at low cost.
4
5
Strongly
Disagree_ _L __
__=__::.._ disagree
_=__
-...J.._ _
3
Undecided
2
Agree
_ _-L.-
_'[
_~S_t_ro_n_g_fy_a_g_re_e_
____J
16. The optometrist offering products at low cost to the client need to focus on saving
costs in his/her practice.
1
Strongly agree
2
Agree
3
Undecided
97
4
Disagree
Strongl:
disa:~e-J
17. Integrating the existing practise for example with a surfacing lab on the premises
will lead to the practise growing.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
18. Practices should grow through investing in industries totally unrelated to

optometry (e.g. restaurant industry or property market).
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
19. The large client base with optometrists offering low cost products does not make it
difficult for competitors to enter that market.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
4
Disagree
Strongly disagree
20. Optometry can not be classified as a service only.

1
Strongly agree
2
Agree
3
Undecided
21. Optometry can be classified as a service-product package.

1
Strongly agree
Agree
3
Undecided
4
Disagree
Strongly disagree
22. The service-product package in optometry has a complex nature in terms of the
mixture of tangible (e.g. glasses) and intangible goods (e.g. service).
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
23. The service experience in optometry has no longevity once it has been completed.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
5
Strongly disagree
24. Multiple client interaction makes it is difficult to standardise services offered in

the optometry practice.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
25. The atmosphere the client experience in the optometric practice does not
determine his/her perception about the service.
1
Strongly agree
2
Agree
3
Undecided
98
5
Strongly disagree
26. The optometrist should not base his/her competitive strategy on the service
expectations of the customers.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
27. Good service requires a high degree of efficiency from the optometrist and his/her
staff.
2
Agree
1
Strongly agree
3
Undecided
Disagree
Strongly disagree
28. Optometrists are selling multiple service experiences to clients.

1
Strongly agree
2
Agree
3
Undecided
Disagree
Strongly disagree
29. Clients base their perception of the service in an optometric practice on all the
interactions experienced in the practice.
A-'C-:~re_e
is_~_r_ee_ _'___S_tr_o_n_gl_:_d_is_a_gr_e_e_
[;trongiy agr_ee_--,-_ _
U_n_d_:_ci_d_ed_---"-[
____
D
30. Clients do not recognise the product and service in the optometric practice as
separate entities.
1 2 3 4 5
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
Strongly disagree
-~----'--~----'--------'---------'---_-=....:..._---=-----'
31. Competitive success can be gained through people.

1
Strongly agree
Agree
3
Undecided
Disagree
32. It is expensive for the optometric practice to defend its current competitive
position.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
33. The threat of attacks from rival optometrists on your client base can never be
eliminated completely.
1.--
1 2 3 4 5
Agree
Undecided
Disagree
disagree
-=-__--L_Strongly
_
Strongly agree
--'-
--'_
99
- - ' -_ _
---=:--=-_~_---'
34. Using economy of scale like for example doing great volumes of contact lens
sales, is an effective defence against attacks from other optometrists on the client
base.
1
Strongly agree
Agree
_ _-'-- Undecided
4
Disagree
..L--_ _-'--_ _--'--
5
Strongly disagree----.J
35. Focusing on brand identity in the optometric practice is not an effective defence
against attacks from other optometrists on the client base.
1
Strongly agree
Agree
Undecided
4
Disagree
Strongly disagree
36. Continued signalling that the practice will retaliate against attacks of rival
optometrists on the client base is an effective defence strategy.
1
Strongly agree
Agree
Undecided
4
Disagree
Strongly disagree
37. The biggest pitfall of a defensive strategy is that optometrists focus too much on
short-term profitability.
1
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
38. The optometry practice must use multiple competencies (e.g. offering low cost
products as well as specialising in low vision) to build sustainable competitive
advantage.
1
Strongly agree
2
Agree
Undecided
Disagree
Strongly disagree
39. The added value customers seek determines the competitive approach of the
optometrist.
1
Strongly agree
2
Agree
Undecided
Disagree
Strongly disagree
100
SECTIONC
Please respond by crossing (X) the answer that most appropriately reflects your
opinion. Choose only one option for each statement.
How important is each of the following in the optometric practise to gain and
sustain competitive advantage.
40. Opening of new stores/practises is not the main force influencing competition in
optometry.
~---------.-~-------.--------.------~--------,
1 2 3 4 5
Strongly agree
Agree
Undecided
_ _- ' -_ _' - - - - _ - - ' ' - -
L . -_ _
'
Disagree
__
~ ' - - - -
Strongly disagree
41. The main force impacting on competition in optometry is bargaining power of

optometristslbuyer groups.
1
Strongly agree
2
Agree
3
Undecided
Disagree
4
_
.L-_Disagree
_
~
3
Undecided
_
2
Agree_ _
.
42. Rivalry among existing optometrists is not the main force affecting competition in
optometry.
5
Strongly disagree
43. The main force influencing competition in optometry is the bargaining power of
suppliers.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
44. The threat of substitute products or services is not the main force impacting on
competition in optometry.
1 2 3 4 5
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
'-----------'--------'-------'-------'-----
45. Offering products at low cost is not the only strategy for gaining competitive
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
46. Offering value-for-money products is the only strategy for gaining competitive
1
Strongly agree
2
Agree
3
Undecided
101
Disagree
Strongly disagree
47. Offering exceptional service is not the only strategy for gaining competitive
1
Strongly agree
2
Agree
Undecided
4
Disagree
Strongly disagree
48. Offering unique/high quality products is the only strategy for gaining competitive
1
Strongly agree
Agree
Undecided
4
Disagree
5
Strongly disagree
49. Offering high technology products (e.g. lenses, frames or contact lenses) does not
lead to the optometrist gaining a competitive advantage.
1
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
50. Offering exceptional service to clients leads to the optometrist gaining competitive
advantage.
__
S_t_ro_n_g_~y_a_g_re_e_-l...- A-,g:. . ~_e

__
__
Und;cided
4
Disagree
5
Strongly disagree
51. Offering products/services with additional add-on benefits to the client (e.g.
receiving free health club membership with every purchase over a certain amount)
leads to the optometrist gaining a competitive advantage.
1
Strongly agree
Agree
'---_U_n_d_:_ci_d_ed_-.JLEis~ree
5
Strongly disagree
52. Offering products with performance enhancing features (e.g. anti-reflection

coatings) will not lead to the optometrist being the preferred provider of the client.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
53. Outperforming rivals through unique capabilities (e.g. offering glasses within one
hour from testing) will ensure that the optometrist will be the preferred provider of
the client.
1
Strongly agree
Agree
Undecided
4
Disagree
Strongly disagree
54. Offering unique products (e.g. contact lenses or frames) will not ensure that the
optometrist will be the preferred provider of the customer.
1
Strongly agree
Agree
Undecided
Disagree
102
Strongly disagree
55. Offering products similar to competitors but at a lower cost will not ensure that
the optometrist will be the preferred provider of the customer.
1
Strongly agree
2
Agree
Undecided
Disagree
Strongly disagree
56. Growing and expanding the existing optometric practise is accomplished by

opening new practises.
1
Strongly agree
2
Agree
Undecided
4
Disagree
5
Strongly disagree
57. Growing and expanding the existing optometric practice is not accomplished by
offering services/products to more customers in the existing area of practise.
1
Strongly agree
2
Agree
5
Strongly disagree
3
Undecided
58. Offering different quality products to clients will not ensure the existing
optometric practice to grow and expand.
1
Strongly agree
Agree
3
Undecided
4
Disagree
5
Strongly disagree
59. Competitive advantage based on unique attributes (e.g. low vision specialisation)
is easily copied by competitors.
1
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
60. Competitive advantage based on unique attributes is lost due the attributes
becoming less important to the clients.
1
Strongly agree
2
Agree
3
Undecided
Disagree
Strongly disagree
61. Multiple sources of uniqueness (e.g. low vision as well as paediatric

specialisation) do not lead to sustainable competitive advantage.
1
Strongly agree
2
Agree
3
Undecided
Disagree
Strongly disagree
62. Competitive advantage based on specialised products is not sustainable.

1
Strongly agree
2
3
Agree
Undecided
_ _=-----_ _L -
L.-_~--C:..----'=-----_--'-
103
4
Disagree
'---___---'-
Strongly disagree
__
~
-!
63. Competitive advantage based on specialised services (e.g. low vision) is

sustainable.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
64. If the specialised services provide in the needs of clients the competitive
advantage is sustainable.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
65. Adequate skilled personnel are not essential in order to gain competitive success
through people.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
66. Managing people effectively in the optometric practise does not result in
competitive advantage being as visible as other more tangible sources (e.g. low
prices).
1
Strongly agree
Agree
3
Undecided
4
Disagree
5
Strongly disagree
67. Employment security plays an important role in managing people towards

1
Strongly agree
Agree
3
Undecided
4
Disagree
5
Strongly disagree
68. Selective staff recruiting, for the optometry practice, does not play an important
role in managing people towards competitive advantage.
1
Strongly agree
Agree
3
Undecided
4
Disagree
Strongly disagree
69. High wages paid to employees plays an important role in managing people
towards competitive advantage.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
70. Incentive pay paid to employees does not play an important role in managing
people towards competitive advantage.
1
Strongly agree
2
Agree
3
Undecided
104
4
Disagree
Strongly disagree
71. Empowering the work force plays an important role in managing people towards
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
72. Training and skills development of staff in the optometry practise does not play an
important role in managing people towards competitive advantage.
1
Strongly agree
2
Agree
3
Undecided
4
Disagree
Strongly disagree
73. Managing people as a source of competitive advantage is more sustainable than

other sources of competitive advantage.
1
Strongly agree
2
Agree
3
Undecided
105
4
Disagree
Strongly disagree
APPENDIX 8
Table Bl
Discipline
Techniques for Assessing Competitive Advantage
Unit of
Strategic Variable
Analysis
Economics
Hypothetical
Cost, Price
Unit of
Source of
Measurement
Technique
Profit
Economists
Objective
Fair and free competition,

Equilibrium
Experience
Business Unit
Volume, Relative
Curve
in a market
Cash
Boston
Superior competitive
cost, Relative market
Consulting
position
segment
share
Group
Product Market
Corporation
Volume, Relative
Portfolio
and Strategic
Business Unit
Boston
Superior corporate
cost, Relative market
Consulting
configuration, Competitive
share, Market growth
Group
advantage at SBU level
Shell
Superior corporate
Cash
(SBU)
Cash
Directional
Corporation
Business sector
Policy Matrix
andSBU
prospects,
configuration, Competitive
Organisation's
advantage at SBU level
competitive
capabilities
Cash
Arthur D. Little
Superior corporate
Patel and
Corporation
Industry maturity,
Younger Matrix
and SBU
Competitive position,
configuration plus
Internal cash
Competitive advantage at
deployment, Return
SBUlevel
on assets
Academic
Shareholder
Corporation
Return on Sales, Sales
Net Present
Value
and SBU
Growth, Capital
Value of
through increasing
Intensity
Discounted
shareholder value
Cash Flows
Portfolios
Corporation
Product market
Cash and
Wallace, Smith
and SBU
position, Resources,
shareholder
Trust Co. Ltd
through multiple portfolios
Customer power,
value
plus synergy
Technology power
Industry,
Power of Buyers and
Return on
Strategy
Strategic
Suppliers, Threat of
Investment
Group and
New Entrants and
superior competitive
Substitutes, Degree of
position at the industry,
Rivalry
strategic group and
Organisation
Michael Porter
Competitive
through structurally
organisation levels
Source: McNamee (1990:2)
106
APPENDIXC
FREQUENCY DISTRIBUTIONS
C.I
Introduction
This appendix contains the statistical information derived from the questionnaires.
Chapter 4 discusses the findings and emerging patterns in more detail. Table C1 to
C10 contains the questions of Section A of the questionnaire. Table Cll and C12
outlines the frequencies of the questions of Section B and Section C of the
questionnaire respectively.
Table CI
Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
Sole Owner
34
70.8
70.8
70.8
Partnership
16.7
16.7
87.5
Private
lOA
10.4
97.9
Other
2.1
2.1
100
Total
48
100
100
Company
Table C2
How many optometrists are employed in your practice/s?
Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
31
64.6
64.6
64.6
2 to4
14
29.2
29.2
93.8
5 to 10
2.1
2.1
95.8
> 15
4.2
4.2
100.0
Total
48
100.0
100.0
107
Table C3
How many practice/s do you own?

Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
31
64.6
64.6
64.6
2 to 4
15
31.3
31.3
95.8
11 to 15
2.1
2.1
97.9
>15
2.1
2.1
100
Total
48
100
100
Table C4
How many complete years does your practice/s exist?

Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
4.2
4.2
4.2
2 to 4
lOA
IDA
14.6
5 to 10
13
27.1
27.1
41.7
11 to 15
14.6
14.6
56.3
> 15
21
43.8
43.8
100
Total
48
100
100
Table C5
How many complete years have you been practising as an

optometrist?
Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
2 to 4
4.2
4.2
4.2
5 to 10
18
37.5
37.5
41.7
11 to 15
18.8
18.8
6004
> 15
19
39.6
39.6
100
Total
48
100
100
108
Table C6
How many complete years have you been the owner or shareholder
of an optometric practise?
Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
4.2
4.2
4.2
2 to 4
18.8
18.8
22.9
5 to 10
15
31.3
31.3
54.2
11 to 15
12.5
12.5
66.7
> 15
16
33.3
33.3
100
Total
48
100
100
Table C7
How would you classify the area your current practice(s) is

situated in?
Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
Shopping Centre
22
45.8
45.8
45.8
Private Shop
13
27.1
27.1
72.9
Private House
16.7
16.7
89.6
Medical Centre
8.3
8.3
97.9
Other
2.1
2.1
100
Total
48
100
100
Table C8
What is the approximate size of your current client base?

Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
0-4000
10
20.8
21.3
21.3
4001-8000
14
29.2
29.8
51.1
8001-12000
10
20.8
21.3
72.3
12001-16000
10.4
10.6
83.0
> 16000
16.7
17.0
100
47
97.9
100
Total
109
Table C9

Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
20-30
11
22.9
22.9
22.9
31-40
16
33.3
33.3
56.3
41-50
12
25.0
25.0
81.3
51-60
12.5
12.5
93.8
> 61
6.3
6.3
100
Total
48
100
100
Table CIO

Frequency
Percentage
Valid
Cumulative
Percentage
Percentage
Male
33
68.8
68.8
68.8
Female
15
31.3
31.3
100.0
Total
48
100
100
110
1
I
Table ell
Section B Frequencies
Strongly
Question
I
1
10
11
12
13
14
15
16
17
18
Agree
Undecided
Disagree
Strongly
Disagree
Agree
27
16,7%
56,3%
16,7%
6,3%
4,2%
14
33
29,2%
68,8%
2,1%
10
33
20,8%
68,8%
2,1%
6,3%
2,1%
16
24
33,3%
50%
6,3%
10,4%
19
14
12,5%
39,6%
14,6%
29,2%
4,2%
30
10,4%
62,5%
14,6%
10,4%
2,1%
17
18
2,1%
35,4%
18,8%
37,5%
6,3%
35
14,6%
72,9%
6,3%
6,3%
31
2,1%
64,6%
14,6%
16,7%
2,1%
31
16,7%
64,6%
8,3%
10,4%
15
11
21
31,3%
22,9%
43,8%
2,1%
16
26
33,3%
10,4%
54,2%
2,1%
17
11
17
4,2%
35,4%
22,9%
35,4%
2,1%
10
37
20,8%
77,1%
37
16,7%
77,1%
6,3%
34
16,7%
2,1%
0
70,8%
8,3%
4,2%
15
13
18
4,2%
31,3%
27,1%
37,5%
20
16
4,2%
8,3%
12,5%
41,7%
33,3%
111
19
20
21
22
23
24
25
25
2,1%
18,8%
18,8%
52,1%
8,3%
33
6,3%
68,8%
4,2%
18,8%
2,1%
36
18,8%
75%
4,2%
2,1%
11
34
22,9%
70,8%
4,2%
2,1%
26
14,6%
16,7%
54,2%
14,6%
20
15
4,2%
41,7%
18,8%
31,3%
4,2%
27
16
56,3%
33,3%
10,4%
26
27
28
29
30
31
32
33
I
34
I
35
36
37
38
28
2,1%
6,4%
14,9%
59,6%
17%
32
15
68,1%
31,9%
16
29
34%
61,7%
4,3%
21
26
44,7%
55,3%
29
17%
61,7%
10,6%
8,5%
2,1%
13
31
27,7%
66%
6,4%
28
12
14.9%
59,6%
25,5%
39
12,8%
83%
4,3%
15
16
16
2,1%
31,3%
33,3%
33,3%
17
11
15
8,3%
35,4%
22,9%
31,3%
2,1%
17
24
10,4%
35,4%
50%
4,2%
33
14,6%
68,8%
10,4%
6,3%
25
10
10,4%
52,1%
20,8%
16,7%
112
_ _ _ _ _3_9
--'-----_8_,:_%J'-_6_02_,:_%_'_'__2_21_,~_%_'_'_
[_0__
__
8,_:%_0_ _
Section C Frequencies
Table C12
Question
Agree
Strongly
Uilldecided
Strongly
Disagree
Disagree
Agree
40
25
15
4,2%
52,1%
12,5%
31,3%
20
12
12,8%
42,6%
19,1%
25,5%
19
11
14
40,4%
23,4%
29,8%
4,3%
18
17
6,4%
19,1%
38,3%
36,2%
41
0
I
42
2,1%
I
43
44
45
46
47
48
49
50
51
52
53
54
55
56
I
27
14
2,1%
57,4%
29,8%
10,6%
11
32
22,9%
66,7%
6,3%
4,2%
15
22
4,2%
31,3%
12,5%
45,8%
6,3%
25
17
52,1%
8,3%
35,4%
4,2%
12
11
17
2,1%
25%
22,9%
47,9%
2,1%
15
25
31,3%
14,6%
52,1%
2,1%
10
34
20,8%
70,8%
6,3%
2,1%
14
19
11
2,1%
29,2%
39,6%
22,9%
6,3%
18
10
17
4,2%
37,5%
20,8%
35,4%
2,1%
20
12
15
2,1%
41,7%
25%
31,3%
15
14
17
1
2,1%
0
I
2,1%
31,3%
29,2%
35,4%
24
13
4,2%
50%
16,7%
27,1%
2,1%
32
8,3%
18,8%
66,7%
6,3%
113
57
59
61
62
63
34
18,8%
6,3%
70,8%
4,2%
10
31
12,5%
20,8%
64,6%
2,1%
10
23
4,2%
20,8%
16,7%
47,9%
19
12
14
4,2%
39,6%
25%
14
22
29,2%
16,7%
45,8%
8,3%
14
25
2,1%
29,2%
14,6%
52,1%
2,1%
30
62,5%
12,5%
18,8%
2,1%
33
10,4%
68,8%
14,6%
6,3%
29
14
6,3%
4,2%
60,4%
29,2%
27
10,4%
18,8%
56,3%
14,6%
34
11
70,8%
22,9%
2,1%
39
2,1%
6,3%
81,3%
10,4%
15
16
15
31,3%
33,3%
31,3%
4,2%
10
30
2,1%
10,4%
20,8%
62,5%
4,2%
29
11
10,4%
60,4%
22,9%
6,3%
33
2,1%
2,1%
10,4%
68,8%
16,7%
26
12
6,3%
54,2%
25%
14,6%
58
60
4,2%
29,2%
I~O:%
I
2,1%
64
65
66
67
4,2%
68
69
70
71
72
73
114
APPENDIX D
RELIABILITY ANALYSIS AND NORMAL DISTRIBUTION
Table Dl
Normal DistnbutlOn - One-Sample Kolmol!orov-Smlrnov Test

Product and Service
N
Normal Parameters(a,b)
Most Extreme Differences
1-=
Kolmo~orov-Smirnov Z
Asymp. Si~. (2-tailed)
a Test distribution is Normal.
b Calculated from data.
Market Technology Employees
47
45
47
48
Mean
75.2340
37.9556
23.8298
23.3542
Std. Deviation
7.3668
5.0134
3.9635
2.8019
Absolute
.089
.106
.112
.154
r-=P:. . :o=s.: . :.it: . :.iv. :. e_ _-----.Jf--_ _---'.:..::.0.=..:89=---_ _--+-----=..:.0:..::6..:..0---+_---'.=1O.=..:3=----l-_~.1~
~N~el!:c:a:::.:ti:..::.ve=-_ _!--
-..:. :.0:.: :5.:. . 7
+---.: ...=.:1O:::.::6:.........j----"..::.1:..:::1-=-2_+-----=.c-.~!-J
.612
.711
.770
1.065
.848
.693
.594
.207
115
Table D 2.1
Product and
Service
Market
Technology
Employees
T a bl e D 2 2
Group Statistics (T-Test)

2. How many optometrists are employed in
your practice/s?
1
2 or more
1
2 or more
1
2 or more
1
2 or more
Mean
31
16
29
16
31
16
31
17
74.6452
76.3750
36.6552
40.3125
23.3226
24.8125
23.1290
23.7647
Std.
Deviation
7.6748
6.8203
5.0233
4.1748
3.9865
3.8509
3.1596
2.0165
Std. Error
Mean
1.3784
1.7051
.9328
1.0437
.7160
.9627
.5675
.4891
Independ ent Samples Test

Levene's
Test for
Equality of
Variances
Equal
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
variances
assumed
Market
Equal
1variances not
assumed
Equal
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
I
t-test for Equality of Means
95 % Confidence
Std. Error Interval of the
Difference Difference
Lower
UPDer
Sig.
df
Sig.
(2
taile
d)
.224
.638
-.759
45
.452
-1.7298
2.2782
-6.3184
2.8587
-.789
33.796
.436
-1.7298
2.1926
-6.1867
2.7270
-2.475
43
.017
-3.6573
1.4776
-6.6371
-.6775
-2.613
36.171
.013
-3.6573
1.3998
-6.4958
-.8189
-1.228
45
.226
-1.4899
1.2134
-3.9338
.9540
31.383 1 .224 1-1.4899
1.1998
-3.9357
.9558
.517
.162
.476
.689
-1.242
3.494
.068
Mean
Differ
ence
-.748
46
.458
-.6357
.8496
-2.3458
1.0745
-.849
44.787
.401
-.6357
.7491
-2.1447
.8734
116
Table D3.1
Product and
Service
Market
Technology
Employees
T a ble D32
Group Statistics (T-Test)

3. How many practices/outlets do
I you own?
1
2 or more
1
2 or more
1
2 or more
1
2 or more
Mean
Std. Deviation
30
17
29
16
30
17
31
17
75.3667
75.0000
37.3103
39.1250
23.7333
24.0000
23.4194
23.2353
7.5039
7.3400
5.6131
3.5567
3.7226
4.4721
3.1281
2.1659
Std. Error
Mean
1.3700
1.7802
1.0423
.8892
.6796
1.0847
.5618
.5253
IndependentSam pies
I T est
Levene's
Test for
Equality of
Variances
I Sig.
F
Equal
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
variances
assumed
Market
Equal
variances not
assumed
Equal
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
.018
.894
df
.162
45
Sig.
(2
taile
d)
I 95 % Confidence
Mean
Std. Error I Interval of the
Differ
ence
Upper
Lower
.872
.3667
2.2604
-4.1861
4.9194
I
I
2.686
.109
1.680
.202
.163
33.987
.871
.3667
2.2464
-4.1985
4.9319
-1.167
43
.250
-1.8147
1.5549
-4.9504
1.3211
-1.324
42.031
.192
-1.8147
1.3701
-4.5795
.9502
-.219
45
.827
-.2667
1.2159
-2.7155
2.1822
-.208
28.598
.836
-.2667
1.2800
-2.8861
~23528
.215
46
.830
.1841
.8543
-1.5356
1.9037
-1.3668
1.7349
I
1.203
.278
.239
43.313
117
.812
.1841
.7692
T a ble D41
I
Product and
Service
Market
Technology
Employees
.
T a ble D42
..
Group StatlstIcs
4. How many complete years does your
cnrrent practice/s exist?
1 to 10
> 10
1 to 10
>10
1 to 10
> 10
1 to 10
>10
Mean
Std.
Deviation
Std. Error
Mean
19
28
18
27
19
28
20
28
78.1579
73.2500
37.7222
38.1111
24.5263
23.3571
23.6000
23.1786
7.1900
6.9208
5.1083
5.0409
4.0465
3.9083
3.0157
2.6813
1.6495
1.3079
1.2040
.9701
.9283
.7386
.6743
.5067
In depend entS amples

I Test
Levene's Test
for Equality
of Variances
Sig.
Mean
(2
Differ
Sig.
t
F
df
taile
ence
d)
Equal
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
variances
assumed
Market
Equal
variances not
assumed
Equal
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
.018
.005
.662
.454
.894
.942
.420
.504
95% Confidence
Upper
Lower
2.349
45
.023
4.9079
2.0895
.6995
9.1163
2.331
37.790
.025
4.9079
2.1051
.6455
9.1702
-.252
43
.802
-.3889
1.5420
-3.4987
2.7209
-.252
36.248
.803
-.3889
1.5462
-3.5240
2.7463
.992
45
.326
1.1692
1.1783
-1.2040
3.5423
.986
37.882
.331
1.1692
1.1863
-1.2326
3.5710
.510
46
.613
.4214
.8268
-1.2429
2.0858
.500
37.990
.620
.4214
.8435
-1.2862
2.1290
118
Table D51
r----
Product and
Service
Market
Technology
Employees
G roup Sta f ISf ICS

5. How many complete years have you been
practisin~ as an optometrist?
1 to 10
> 10
1 to 10
> 10
~_10
>10
~_10
>10
T able D52
19
28
18
27
19
28
20
28
77.9474
73.3929
37.2778
38.4074
24.0526
23.6786
23.3500
23.3571
Std.
Deviation
7.0748
7.0990
4.5993
5.3079
3.6435
4.2256
2.9784
2.7246
Std. Error
Mean
1.6231
1.3416
1.0841
1.0215
.8359
.7986
.6660
.5149 __

Sig.
Market
Mean
In dependent Sam pies

I Tes
t
Levene's
Test for
Equality of
Variances
Product
and
Service
Equal
variances
assumed
Equal
variances not
assumed
Equal
variances
assumed
Equal
variances not
assumed
Equal
variances
Technolo ~umed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
(2
Mean
Differ
ence
95 % Confidence
Upper
Lower
Sig.
df
.159
.692
2.161
45
.036
4.5545
2.1072
.3105
8.7985
2.163
38.894
.037
4.5545
2.1058
.2949
8.8142
-.737
43
.465
-1.1296
1.5335
-4.2223
1.9630
.561
.458
taile
d)
--
.029
.866
-.758
39.982
.453
-1.1296
1.4895
-4.1401
1.8808
.314
45
.755
.3741
1.1898
-2.0223
2.7704
.324
42.339
.748
.3741
1.1560
-1.9583
2.7065
-.009
46
.993
7.1429
E-03
.8292
-1.6762
1.6619
-.008
38.757
.993
7.1429
E-03
.8418
-1.7102
1.6960
.362
.550
119
Table D61
G roup StatIstIcs
6. How many complete years have you been the

owner or shareholder of an optometric practise?
Product and 1 to 10
Service
> 10
1 to 10
Market
> 10
1 to 10
Technology
> 10
1 to 10
Employees
> 10
T a ble D62
I nd epend ent Samples

I T est
Levene's
Test for
Equality
of
Variances
Equal
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
variances
assumed
Market
Equal
variances not
assumed
Equal
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
.031
.477
.293
.018
Sig.
.860
.493
.591
.895
Mean
25
22
23
22
25
22
26
22
77.7200
72.4091
37.7826
38.1364
24.5600
23.0000
23.5000
23.1818
Std.
Deviatio
n
6.9793
6.8914
4.6315
5.4885
3.5247
4.3425
2.6870
2.9863
Std.
Error
Mean
1.3959
1.4693
.9657
1.1701
.7049
.9258
.5270
.6367
ttest for Equality of Means
Sig.
F
tailed)
Mean
Differ
ence
(2.
df
95 % Confidence
Upper
Lower
2.618
45
.012
5.3109
2.0283
1.2258
9.3961
2.621
44.381
.012
5.3109
2.0266
1.2276
9.3943
-.234
43
.816
-.3538
1.5114
-3.4018
2.6943
-.233
41.134
.817
-.3538
1.5172
-3.4175
2.7100
1.359
45
.181
1.5600
1.1481
-.7525
3.8725
1.341
40.498
.188
1.5600
1.1636
-.7909
3.9109
.388
46
.699
.3182
.8191
-1.3306
1.9669
.385
42.768
.702
.3182
.8265
-1.3488
1.9852
120
T a hie D71
~
Product and
Service
Market
Technology
I Employees
T ahie D72
G roup StatIstIcs
7. How would you classify the area your
current practice(s) is situated in?
Shopping Centre/Medical Centre
Private Shop!House
Shopping CentrelMedical Centre
Private Shop!House
Shopping CentrelMedical Centre
Private Shop!House
Shopping Centre/Medical Centre
Private Shop!House
Mean
25
21
23
21
25
21
26
21
75.8400
74.4762
38.6522
37.2381
24.2000
23.3333
23.6923
23.0476
1Deviation
Std.
6.0186
8.9589
5.3395
4.7739
3.9264
4.1392
2.9089
2.7106
Std. Error
Mean
1.2037
1.9550
1.1134
1.0418
.7853_
.9033
.5705
.5915
Independ ent Sam PJes

I Test
Levene's
Test for
Equality of
Variances
F
Equal
2.802
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
1.704
variances
assumed
Market
Equal
variances not
assumed
Equal
.000
variances
Technolo
assumed
gy
Equal
variances not
assumed
Equal
.179
variances
Employe
assumed
es
Equal
variances not
assumed

95 % Confidence
Mean
Sig. (2
Differe
tailed)
nce
Upper
Lower
Sig.
df
.101
.614
44
.542
1.3638
2.2199
-3.1100
5.8376
.594
33.970
.556
1.3638
2.2959
-3.3021
6.0297
.923
42
.361
1.4141
1.5327
-1.6790
4.5071
.927
41.985
.359
1.4141
1.5247
-1.6630
4.4912
.728
44
.471
.8667
1.1913
-1.5342
3.2675
.724
41.772
.473
.8667
1.1969
-1.5491
3.2825
.779
45
.440
.6447
.8281
-1.0232
2.3126
.784
44.033
.437
.6447
.8218
-1.0115
2.3009
.199
.985
.674
121
T abl e D8!
Product and
Service
Market
Technology
Employees
T a ble D82
GrouD StatJstJcs
8. What is the approximate size of your
current client base?
0-8000
>8000
0-8000
>8000
0-8000
>8000
0-8000
>8000
Ind ependen t Samples

I T est
Levene's
Test for
Equality
of
Variances
Equal
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
variances
assumed
Market
Equal
variances not
assumed
Equal
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
.098
.422
.173
.600
Sig.
.755
.519
.680
.443
Mean
24
22
23
21
24
22
24
23
74.7500
76.0455
36.8261
39.0000
23.0417
24.8182
22.6250
24.0870
Std. Error
Mean
1.5455
1.5563
.9486
1.1772
.8480
.7803
.6221
.5065
ttest for Equality of Means
Sig.
F
Std.
Deviation
7.5714
7.2996
4.5492
5.3944
4.1544
3.6598
3.0476
2.4292
df
tailed)
Mean
Differ
ence
(2
95 % Confidence
Lower
DDPer
-.590
44
.558
-1.2955
2.1969
-5.7230
3.1320
-.591
43.879
.558
-1.2955
2.1933
-5.7161
3.1252
-1.449
42
.155
-2.1739
1.5000
-5.2010
.8531
-1.438
39.331
.158
-2.1739
1.5118
-5.2310
.8832
-1.533
44
.132
-1.7765
1.1588
-4.1120
.5590
-1.542
43.938
.130
-1.7765
1.1524
-4.0990
.5460
-1.814
45
.076
-1.4620
.8061
-3.0856
.1617
-1.822
43.580
.075
-1.4620
.8022
-3.0792
.1553
122
T a bl e D91
.
Product and Service

Market
Technology
Employees
T a bie D92
Group StatIstIcs
9. What is your age in complete
vears?
20 - 40
41 or older
20 - 40
41 or older
20 - 40
41 or older
20 - 40
41 or older
Mean
Std. Deviation
Std. Error Mean
26
21
25
20
26
21
27
21
77.2308
72.7619
37.9200
38.0000
24.0769
23.5238
23.2222
23.5238
7.9312
5.8814
4.3772
5.8310
3.8670
4.1547
2.8193
2.8393
1.5554
1.2834
.8754
1.3038
.7584
.9066
.5426
.6196
I Test
I nd ependent Sam Illes
Levene's
Test for
Equality of
Variances
~-
Sig.
Mean
Differ
ence
95 % Confidence
Upper
Lower
Sig.
df
.592
.446
2.147
45
.037
4.4689
2.0813
.2770
8.6607
2.216
44.719
.032
4.4689
2.0166
.4066
8.5312
-.053
43
.958
8.0000
E-02
1.5214
-3.1481
2.9881
-.051
34.450
.960
8.0000
E-02
1.5705
-3.2701
3.1101
.472
45
.639
.5531
1.1728
-1.8091
2.9153
.468
41.518
.642
.5531
1.1820
-1.8331
2.9393
-.367
46
.716
-.3016
.8228
-1.9579
1.3547
-.366
42.989
.716
-.3016
.8236
-1.9625
1.3593
-.------~
Equal
variances
Product
assumed
and
Equal
Service
variances not
assumed
Equal
variances
assumed
Market
Equal
variances not
assumed
Equal
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
variances
Employe assumed
es
Equal
variances not
assumed
(2
taile
d)
2.023
.162
.114
.089
.737
.767
123
T a hi e DI0l
Product and Service

Market
Technology
Employees
T a hie DI02
G roup Sta f IS f ICS

10. What is your
l!ender?
Male
Female
Male
Female
Male
Female
Male
Female
Mean
Std. Deviation
Std. Error Mean
32
15
31
14
32
15
33
15
75.2500
75.2000
38.1613
37.5000
23.7188
24.0667
23.0000
24.1333
5.7305
10.2762
5.3172
4.4159
4.1522
3.6541
3.0000
2.1996
1.0130
2.6533
.9550
1.1802
.7340
.9435
.5222
.5679
In depend ent Sam pes

I T est
Levene's
Test for
Equality of
Variances

Sig.
Equal
variances
4.564
Product
assumed
and
Equal
Service
variances not
assumed
Equal
.366
variances
assumed
Market
Equal
variances not
assumed
Equal
.302
variances
Technolo assumed
gy
Equal
variances not
assumed
Equal
.743
variances
Employe assumed
es
Equal
variances not
assumed
(2
Mean
Differ
ence
9S % Confidence
Upper
Lower
Sig.
df
.038
.021
45
.983
5.000E
02
2.3307
-4.6442
4.7442
.018
18.204
.986
5.000E
02
2.8401
-5.9120
6.0120
.406
43
.687
.6613
1.6299
-2.6257
3.9483
.436
30.021
.666
.6613
1.5182
-2.4392
3.7618
-.278
45
.783
-.3479
1.2529
-2.8714
2.1755
-.291
30.955
.773
-.3479
1.1954
-2.7861
2.0902
-1.309
46
.197
-1.1333
.8660
-2.8764
.6098
-1.469
36.323
.150
-1.1333
.7715
-2.6976
.4309
.549
.585
.393
124
taile
d)
Table Dll
Valid
Missin~
Mean
Median
Mode
Std Deviation
Minimum
Maximum
Factor Frequencies
Product and
Service
47
1
3.4197
3.4091
3.41
.33486
2.73
4.41
Market
Technology
Employees
45
3
2.9197
2.9231
2.85
.38565
1.92
3.62
47
1
3.4043
3.4286
4.14
.56622
2.29
4.43
48
0
3.8924
4.00
4.00
.46698
2.50
5.00
125

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Gaining and Sustaining a Competitive Advantage in an

Nicolaas Francois Alberts

A Short Dissertation Submitted

Required of the Degree Master of Commerci

The Faculty of Economic and Management Sciences

The Rand Afrikaans University

Study Leadership of TFJ Oosthuizen

The study is aimed at developing a model by which a competitive advantage can be

The highest conformity amongst respondents is given to the Employee dimension

CHAPTER 2 - COMPETITIVE ADVANTAGE DYNAMICS

Competitive Advantage Defined

Low-Cost Provider Strategies

Best-Cost Provider Strategy

The Value Chain

2.2.5.1 Intensive Growth

2.2.5.2 Integrative Growth

2.2.5.3 Diversification Growth

Sustainability of Competitive Advantage

Sustainability of Cost Leadership

Sustainability of a Focus Strategy

2.3.4 Creating Competitive Advantage through

2.3.5 Competitive Advantage through People

2.3.6 The Learning Organisation

Strategies for Defending the Competitive Advantage

2.4.1 Raising structural barriers

2.4.1.1 Fill product or positioning gaps

2.4.1.2 Block channel access

2.4.1.3 Raise buyer switching costs

2.4.1.4 Defensively increase scale economies

2.4.1.5 Form coalitions to raise barriers

2.4.2 Increasing expected retaliation

2.4.2.1 Signal commitment to defend

2.4.2.2 Signal incipient barriers

2.4.2.2 Match guarantees

2.4.2.4 Establish defensive coalitions

2.4.3 Lowering the inducement for attack

2.4.3.1 Reducing profit targets

2.4.3.2 Managing competitor assumptions

Competitive Advantage through Customer Focus

2.6.1 Organisation Culture and Competitive

The Changing Basis of Competitive Advantage

CHAPTER 3 - RESEARCH METHODOLOGY

3.7.1 Product and Service

Coding ofthe questionnaire

Product and Service

Product and Service

4.7.2 Dimension Frequencies

CHAPTER 5 - CONCLUSION AND RECOMMENDATIONS

APPENDIX B - TECHNIQUES FOR ASSESSING COMPETITIVE 106

APPENDIX C - FREQUENCY DISTRIBUTIONS

APPENDIX D - RELIABILITY ANALYSIS

Porter's Generic Competitive Strategies

Competitive Advantage Through

Human Resource Management

The Five Competitive Forces That Determine

The Value Chain

The Service Triangle

Number of optometrists employed in the practice/so

Number of practices owned.

Number of complete years practice/s exist.

Number of complete years optometrist has

Number of complete years as owner or shareholder

Positioning of current practice/so

Approximate size of current client base.