2. Learning Objectives To learn the methods that a firm might employ to successfully achieve each of the four building blocks of competitive advantage

3. Achieving Superior Efficiency Economies of scale Learning effects The experience curve Flexible manufacturing & mass customization Marketing Materials management & JIT

4. Achieving Superior Efficiency (cont) R & D Strategy Human resource strategy - Hiring strategy - Employee training - Self-management teams - Pay for performance Information systems Infrastructure

5. Achieving Superior Quality: Attaining superior reliability Build organizational commitment to quality Create quality leaders Focus on the customer Identify processes and the source of defects Find ways to measure quality Set goals and create incentives

6. Achieving Superior Quality: Implementing TQM Solicit input from employees Build long-term relationships with suppliers Design for ease of manufacture Break down barriers between functions

7. Achieving Superior Innovation High failure rates - Uncertainty - Poor commercialization - Poor positioning strategy - Technological myopia - Being slow to market

8. Achieving Superior Innovation (cont) Building competencies in innovation - Skills in basic and applied research - Project selection and management - Cross-functional integration - Product development teams - Partly parallel development processes - Learn from experience

9. Achieving Superior Customer Responsiveness Focusing on the customer - Demonstrating leadership - Shaping employee attitudes - Bringing customers into the company Satisfying customers’ needs - Customization - Response time