BSM 600 Chapter Notes - Chapter 4: California State Route 2, Niche Market, Imitation
26 Jan 2017
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Fos chapter 4: the nature and sources of competitive advantage. Started as family-run department store chain mass market discount store for value driven shoppers who wanted a high quality experience. Expect more, pay less -- wanted to provide many options while focusing on value. Design: key attribute, make affordable, great design for everyone. A has ca over b when it earns/has potential to earn a consistently higher rate of profit. Difference between ca and higher profitability: ca may not be revealed in higher profitability; could instead be investment in market share/tech/customer loyalty/etc. In long term, competition eliminates differences in profitability between a and b, but external/internal changes can create short term opportunities for creating an advantage. Ca if they have different effects on companies because of different resources, capabilities, strategic positioning. More turbulence = more sources of change. More diff in firms" rc, more dispersion of profitability.
