DR JAN ALPENBERG, PHD, ECON DRTYNDALE UNIVERSITY

TORONTO, ON

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Value creation and value proposition

Competitive Advantage

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Competitive advantage A firm’s profitability is greater than the average

profitability for all firms in its industry

Sustained competitive advantage A firm maintains competitive advantage for a number

of years

Profitability = Profit/Capital

Value Creation per Unit

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Main factors that creates value and competitive advantage:

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Superior quality (both percieved and technical)Superior innovationSuperior effeciency (internal and external)

Internal – output/input – ”to do the things right” External – output/goals – ”to do the right thing”

Superior customer responsiveness (leadtime, satisfaction, loyalty, unique products)

To offer the customer what they want, when they want it, in the right quantity, to the right quality, to the right price)

Value proposition

Jan Alpenberg, Youth Unlimited, Blueprint 2012

How is your company going to create value for the customer?

What are the components/attributes that creates the value?

List your components… What are the things the customer is buying? What do the customer get when they buy the product?

Functions? Benefits? Savings? What is the deal?

Value Creation and Pricing Options

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Comparing Toyota and General Motors

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Differentiation and Cost Structure: Roots of Competitive Advantage

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Distinctive Competences and Competitive Advantage

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Distinctive competencies Firm-specific strengths that allow a company to gain

competitive advantage by differentiating its products and/or achieving lower costs than its rivals

Arise from resources and capabilities

The Role of Resources

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Resources Capital or financial, physical, social or human,

technological, and organizational factor endowments Tangible and intangible

A firm-specific and difficult to imitate resource is likely to lead to distinctive competency

A valuable resource that creates strong demand for a firm’s products may lead to distinctive competency

The Role of Capabilities

Jan Alpenberg, Youth Unlimited, Blueprint 2012

Capabilities A company’s skills at coordinating and using its

resources

Capabilities are the product of organizational structure, processes, and control systems