1. MKTM028 Strategic Marketing
Sustainable Competitive Advantage
Week 7
Dr Stephen Castle
Dr Elizabth Kim
Iain Bromley

2. Learning Objectives:
By the end of this session students will understand and appreciate:
Why sustainable competitive advantage is important
How competitive advantage is achieved in the first place and
How competitive advantage is sustained in the long term

3. Creating Sustainable Competitive Advantage
What contributes to creating customer value?
Ask the question -
Does this resource contribute to creating value for customers that can be leveraged to create value for the organisation?
(Hooley at al, 2012)

4. Creating Sustainable Competitive Advantage
We will be looking at this over the next weeks….
Through the configuration of resources
Through S-T-P
Through the marketing mix – product….

5. Advantage-creating resources
Hooley et al (2012)

6. Resource imitability ladder
Adapted from Collis and Montgomery (1997).
Hooley et al (2012)

7. Generic routes to competitive advantage
Porter (1980) cost leadership & differentiation How do you actually achieve cost leadership? Porter (1985) talked of “cost drivers” Is cost leadership a “production orientation?”

8. Porter’s cost drivers………..
Economies of scale – bigger always best?
The experience curve – sounds good?
Capacity utilisation – why is it good?
Linkages – examples
Interrelationships – how do they add value?
Timing – “strategic windows”

9. Generic routes to competitive advantage creation
Hooley et al (2012)
Generic routes to competitive advantage creation

10. Uniqueness drivers
Hooley et al (2012)

11. Achieving differentiation
Linked very closely to “policy choices”
Product differentiation – generic, expected, augmented & “potential”
Distribution differentiation – new/multiple routes to market
Price differentiation – low or premium?
Promotional differentiation – iconic or creative communications
Brand differentiation – from USP to UEP

12. Levels of product/service offering
Hooley et al (2012)

13. Sustainable Competitive Advantage
So there are a number of ways to create competitive advantage – but what about sustaining it?
Central to offering unique and valued products & services is the identification of the key differentiating variables – those with the greatest potential leverage
Role of innovation?
Importance of STP
Management of company reputation

14. Alternative emphases for differentiation
Hooley et al (2012)

15. Factors affecting business strength
Hooley et al (2012)

16. Dynamic marketplace strategies
Successful competitive strategy amounts to combining attacking & defensive moves to build a stronger position in the chosen marketplace

17. Attack strategies A D t e f a c n k d e r r 4. Bypass attack
2. Flank attack A t a c k e r D e f n d r
5. Guerrilla
attack
1. Frontal attack
Drummond and Ensor (2005)
3. Encirclement

18. Market challenger strategies
Hooley et al (2012)

19. Frontal attack
Hooley et al (2012)

20. Flanking attack
Hooley et al (2012)

21. Encirclement attack
Hooley et al (2012)

22. Bypass strategy
Hooley et al (2012)

23. Guerrilla tactics
Hooley et al (2012)

24. Defence strategies A t a c k e r D e f n d r 2. Flanking defence
3. Pre-emptive defence
6. Strategic
withdrawal
4. Counteroffensive
1. Position
defence
Drummond and Ensor (2005)
5. Mobile defence

25. Defensive strategies
Hooley et al (2012)

26. Position defense
Hooley et al (2012)

27. Flanking defense
Hooley et al (2012)

28. Pre-emptive strike
Hooley et al (2012)

29. Hit back at them where it hurts
Challenger
Defender
Hit back at them where it hurts
Counter Offensive

30. Mobile defense
Hooley et al (2012)

31. Contraction (focus) defense
Hooley et al (2012)

32. The military analogy
Offers a much wider range of options and combinations for the competitive marketplace
Acknowledges the immediacy of the competitive reality
Talks in terms that business people recognise and relate to

33. Conclusion
Never neat and tidy -
as in real battle, confusion reigns
alliances, acquisitions further confuse.
But the company who sees the strategic situation most clearly, and plans…. wins

34. 5 basic competitive strategies
Build/growth strategies
Hold/maintenance strategies
Niche/focus strategies
Harvest/reaping strategies
Deletion/divestment strategies

35. Niche strategies
Hooley et al (2012)

36. Harvesting strategies
Hooley et al (2012)

37. Divestment strategies
Hooley et al (2012)

38. S-T-P
Week 8

39. Positioning ATTACKING
Product People
Price Physical Evidence
Place Process
Promotion
7Ps
4Ps
The Marketing Mix

40. Learning Objectives:
By the end of this session students will understand and appreciate:
Why sustainable competitive advantage is important
How competitive advantage is achieved in the first place and
How competitive advantage is sustained in the long term