MANAGING OFFERING-BASED
SCA
CHAPTER 6
Sustainable Competitive
Advantage
when a company is able to generage more
customer value than competitive firms in its
industry for the same set of products and service
categories and when other firms are unable to
duplicate its effective strategy.
… a lasting ablility to outperform all competition
in a particular area or industry.
Marketing-Based Sources of
SCA
Brands
most effective in large consumer
markets
Offerings
effective if potential to disrupt
Relationships
most effective in B2B, service and
complex settings
Sources of SCA
Relationships
Brands
Offerings
Pre-Industrial
Age
Industrial
Revolution
Technology
Revolution
Services
Revolution
Interpersonal
relationships are the
greatest barrier to
competitive attacks
Brands are important
to signal product
quality
Offerings and
innovations
become key sources
of differentiation
All three BOR strategies are
critical to success, but
relationships are becoming
more important with the
shift to a service economy
in more developed
countries (85% of U.S. GNP)
RELATIONSHIPS
OFFERINGS
the core component of a value proposition.
… the tangible and intangible value offered by a firm.
Add value by:
1. Providing functionalitiy at a lower cost
2. Innovative solution
OFFERING EQUITY
the core value that the performance of
the product or service offers the customer,
absent any brand or relaitonship equity
effects.
the foundation!
BENEFITS OF OFFERING EQUITY
Simply announcing a new product = increase firms stock price by 0.5% same
day
Launching new offerings = long-term impact on firm value e.g., enhancing brand
even greater impact for radically innovative offerings compared to minor,
incremental changes
1. Provides more value
2. Allows higher prices
3. Can have exclusive rights such as patents
4. Motivate customer to switch from competitor
5. Can help acquire new customers or enter new markets
6. Impacts entire organization
OFFERING SCA
Short-lived alone
Must add brand-based and/or relational-based SCA
Provides a powerful platform to build synergistic,
longer lasting SCA
INNOVATION PROCESS
creation of substantial new value for customers
and the firm by creatively changing one or more
dimensions of the business.
WAYS TO INNOVATE
WHAT: changing what the firm offers
WHO: changing who the customer is
HOW: changing how to market to customers
WHERE: changing where to market products
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