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C H A P T E R 1 : B U S I N E S S
S T R AT E G YP R O U D LY P R E S E N T
P h . D . V i p u t O n g s a k u l
G R O U P 1
COMPETITION : The R igh t M ind -Set
© your company name. All rights reserved. Title of your presentation
วิสยัทศัน์
ของเอสซีจี คือ ภายในปี พ.ศ. 2558 เอสซีจีจะเป็นองค์กรท่ีได้รับการยกย่องในฐานะเป็นองค์กรแหง่นวตักรรมท่ีน่าร่วมงานด้วยและ เป็นแบบอยา่งด้านบรรษัทภิบาลและการพฒันาอยา่งยัง่ยืน
VISION เราให้บริการความสะดวกกบัทกุชมุชน
วิสยัทศัน์VISION
วิสยัทศัน์VISION เพื่อเป็น “ ดจิิตอล-Ecompany ”
ท่ีดีท่ีสดุ
ต้องการมุง่ไปสูค่วามเป็นผู้น าในธุรกิจเคร่ืองด่ืมท่ีมีคณุภาพ พร้อมกบัสร้างนวตักรรมใหม่ท่ีจะเติบโตควบคูไ่ปกบัคณุภาพชีวิตท่ีดีของคนในสงัคม เป็นผูน้ ำ มีคุณภำพ และ เติบโต
วิสยัทศัน์VISION
• Telling goal or aspiration
• Highlight key action
But Core question is :
Performance
in the face
of competition
Strategy• Strategy explains how an organization,
faced with competition, will achieve
superior performance
competition Find competitiveadvantage
• One of the reasons so many companies fail to develop good strategies is that the people running them operate with fundamental misconceptions about what competition is and how it works.
No
competitionNo need
for strategy
No need tocome up witha way to win
Because their belief about the nature of competition
Companies proudly proclaim that
they produce the “BEST”
products, provide the “BEST”
service , and attract the “BEST” talent.
It will lead you inevitably to a flawed strategy
and that will lead to mediocre performance.
If you want to win, its obvious that
you should be the best. Or is it ?
To be the best Competition to be
the best syndrome
Warfare Business competition
- Only one winner
- Destroy enemies
- Enable to win without
annihilating your rivals
“everyday low price” “flair along with low prices”
Companies can choose to create
their own event
Sport Business competition- Focus on outperforming their rivals
- One contest with one set of rules
- Only one winner
- More open ended and
multidimensional
“Fast burgers” “Slow burgers”
Focus more on meeting customer needs
than on demolishing rivals.
The best hotel for one customer is not the best for another.
The best sales encounter for one customer is not the best for another
There is no best art museum, no one best way to
promote environmental sustainability
Want customer to shop?
“don’t want seats that are
too comfortable”
Flexibility
“reconfigure waiting area”
Seating in airport areas
Companies will benchmark each other’s
practices and products
(One upman ship is not strategy)
Hilton - serenity bedMarriott - revive collection
Radisson - sleep number bed
Browne plazw - sleep
advantage program
Hyatt - Hyatt grant bed
Bed war
ended in 2006 because large investments developing,
installing and promoting its offering.
Low profit
All rivals compete on the same dimension,
no one gains a competitive advantage
Companies will benchmark each other’s
practices and products
(One upman ship is not strategy)
Bed war
But guests will not differentiate one
hotel from another just “bed quality”
Competition to be the best = impossible goal
ONE BEST WAYListening
same advice
Follow same
prescription
Companies will benchmark each other’s
practices and products
(One upman ship is not strategy)
Zero-sum competition
(no one can win)
price competition leads to the suffers of:
Destroyed an industry’s profitability + limit competition
+ Swallow each other up + reducing the no.
of rivals and allowing on or few companies to dominate the market
Because rivals are squeezed for
resources and forced to cut cost.
Producers Customers Supplier Employees
Isn’t “The best’ good for
customers?
“What’s good for customers
(lower prices) is bad for
companies (lower profits)”
Perfect competition in classical economic =Evenly matched rivals selling equivalent products go head to head,
driving prices (and profits) down.
“MOST EFFICIENT WAY TO PROMOTE SOCIAL
WELFARE”
Some customers want more
and some want less
There will be individuals in both groups who will not
be well served by the average
Isn’t “The best’ good for
customers?
Limited choice = destroy value
Pay too much for extra or forced to make do with
what is offered, even if it’s not really what you need.
• With all companies heading for the same place, it is difficult
to stay in the lead for long. Competitive advantage will be
temporary.
• Companies work hard, but their gains in quality and cost are
not rewarded with attractive profitability.
• Poor profitability undermines investment in future, making it
harder to improve value for customers
Isn’t “The best’ good for
customers?
Zero-sum competition that has come increasingly
To dominate management thinking
Should compete to be unique
This concept is all about value
• It’s about uniqueness in the value you create and how you create it.
Madrid to Barcelona
Car or train Short flightCompete between
airline
High speed train
Offer reclining seat,
computr outlets, food ,
entertainment + lower
Co2
Security screening ,
carry-on restriction, delay
Competition to be unique
rival
Customer
shift Po
sit
ive
ad
va
nta
ge
Cu
sto
mer
sh
ift
Race to the bottom Produces better outcomes
CUSTOMERS CAN GET
REAL CHOICE
Zero-sum game Positive-sum game
Competition to be unique
Red ocean vs. Blue ocean
Defining Red and Blue Ocean
What’s Red, What’s Blue ?
Red Ocean Strategy
• Compete in existing market
space
• Beat the competition
• Exploit existing demand
• Make the value-cost trade off
• Align strategy choice of
differentiation or low cost
Blue Ocean Strategy
• Create uncontested market
space
• Make the competition irrelevant
• Create & capture new demand
• Break the value-cost trade off
• Simultaneous pursuit strategy of
differentiation and low cost
• Managers must understand that their choices will influence the kind of competition that prevails in their industry.
• Beware of anyone who claims there is only one way to win
• Competition is multidimensional, and strategy is about making choices along many dimensions not just one.
• No single prescription about which choices to make is valid for every company in every industry
Competition to be unique
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