Building Competitive Advantage Through

Functional- Level Strategy

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 1

 Functional Level Strategies
Improving

Effectiveness

Operations

21.09.2017 2
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy
 Ch.4 Overview

Improving Achieving

Effectiveness Superior

Functional Level
Strategies Efficiency

Quality
Operations
innovation

Customers
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy
responsiveness
21.09.2017 3
 Chapter 4: Overview

Distinctive Competencies

Functional strategies

Superior

Efficiency Innovation Customer responsiveness

Quality

Value
Differentiation Low Cost Creation Superior
Profitability

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 4

 Achieving Superior Efficiency

Labour

Land

Input Capital

Management

Efficiency
Know how

Goods
Output
Services
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 5
 Achieving Superior Efficiency
prices
Economics of Scale

Superior Efficiency
volume

Learning Effects learning by doing

Experience Curve cost structure

Flexible Systems/mass
Mass production
customization

Marketing Marketing strategies

21.09.2017 6
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy
 Material Management (JIT) Efficiency

Hiring Strategy
R&D Strategy

Employee Training
HR Strategy
Material Management (JIT) Self-Managing Team

IT
Pay for performance

Infrastructure

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 7

 Achieving Superior Quality

Quality as Reliability

Superior Quality Quality as Excellence

Allows for differentiation premium price

Advantages
Eliminate defeats efficiency

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 8

 Superior Quality
Six Sigma
Attaining Superior Reliability
Form
TQM

Superior Quality Features

Implementing Reliability Cooperation all functions

Performance
Quality as Excellence Differentiation

Durability

Reliability

Style
Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 9
 Achieving Superior Innovation
1. Differentiated
Premium price
products
Competitive advantage
2. Lower cost
cost
structure

1.Uncertainty (Demand)

2. poorly commercialised

Superior Innovations
Failure Rate of Innovation 3.Poor positioning

4.Marketing Failure

5.Slow cycle time

Innovation Failure Customer needs/manufacturing/timing/reengineering

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 10

 Achieving Superior Customer Responsiveness

Leadership

Employees
Want
attitude

Focus on Customer When

Bring customers
into the company
Price
Customer Responsiveness

Customization

Satisfying customer Needs

Response time

Chapter 1: Building Competitive Advantage Through Functional - Level Strategy 21.09.2017 11