Marketing Strategy and Competitive Positioning pdf ebook
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hooley graham et al marketing strategy and competitive posit
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Figure 10.3
Generic routes to competitive advantage creation Market advantage Financial disadvantage High High Average Average Cost relative to competitors Cust omer valued uniqueness Low Low Market disadvantage Financial advantage Financial disadvantage Market and financial advantage Market and financial disadvantage Financial advantage Market advantage Market disadvantage Stuck in the middle! 261 ACHIEVING COST LEADERSHIP that companies with larger market share will, by definition, have a cost advantage through experience, assuming all companies are operating on the same experience curve. Experience can be brought into the company by hiring experienced staff, and be enhanced through training. Conversely, competitors may poach experience by attracting away skilled staff. The experience curve as an explanation of costs has come under increasing scrutiny. Gluck (1986) argued that when the world changed from a high-growth ‘big is beautiful’ mentality to a low-growth ‘big is bust’ realisation, the experience curve fell into disfavour. He concluded that in today’s business environments, competitive advantages that rely too heavily on economies of scale in manufacturing or distribution are often no longer sus- tainable. In addition, a shift in the level or type of technology employed may result in an inexperienced newcomer reducing costs to below those of a more experienced incumbent, essentially moving on to a lower experience curve. Finally, the concept was derived in manu- facturing industries and it is not at all clear how far it is applicable to the service sector. 10.3.3 Capacity utilisation Capacity utilisation has been shown to have a major impact on unit costs. The PIMS study (see Farris and Moore, 2004) has demonstrated a clear positive association between utilisa- tion and return on investment. Significantly, the relationship is stronger for smaller compa- nies than for larger ones. Major discontinuities or changes in utilisation can add significantly to costs, hence the need to plan production and inventory to minimise seasonal fluctuations. Many companies also avoid segments of the market where demand fluctuates wildly for this very reason (see Chapter 9 on factors influencing market attractiveness). 10.3.4 Linkages A further set of cost drivers is linkages. These concern the other activities of the firm in producing and marketing the product that have an effect on the costs. Quality control and inspection procedures, for example, can have a significant impact on servicing costs and Download 6.59 Mb. Do'stlaringiz bilan baham: 
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