competitive advantage theory ppt
TRANSCRIPT
Competitive Advantage TheoryBy Michael Porter
Presented by –
rahul
Competitive Advantage and Competitiveness
• Competitive advantage
resides inside the company.
• Competitive success depends
on company choices.
• Competitive advantage resides in
the locations in which the
company is based.
• Cluster participation is an
important contributor to
competitiveness.
Internal External
What is Competitiveness?
Competitiveness depends on the productivity
- Productivity sets the sustainable standard of
living
- How productively a nation competes
- Combination of domestic and foreign firms
Nations compete to offer the most productive
environment for business
The public and private sectors play different but
interrelated roles in creating a productive
company
Competitive Advantage Theory of Nations
• Depends on the collective
advantage of the nation’s
firms
• Over times, the relationship
becomes reciprocal:
competitive advantage held
by the nation drives the
development of new firms
and industries with the same
competitive advantage.
Examples
Competitive Advantage Theory of Firms
• Possession of sources of distinctive competence
relative to others.
• E.g. –
Nokia
Wal Mart and Tesco
Southeast Asia
Economic coordination among neighboring countries can enhance
competitiveness
How Do Nations Gain Competitive Advantage?
INNOVATION
• Aggregate innovation capacity derived from collective innovation of firms
• More innovative firms, stronger nation’s competitive advantage
• Innovation promotes productivity; leads to efficient use of resources
• Productivity – key determinant of nation’s standard of living and national per-capita income