BU491 Chapter Notes - Chapter 3: Competitive Advantage, Factor Endowment
Document Summary
Competitive advantage is developed by taking strategic actions that optimize a company"s achievement of these three different goals (from the 1980s): Global strategy was the successful practice of product standardization. Effective global strategy required the approach of a fox that knows many tricks. A broad product portfolio, with many product varieties is requires so that investments in technologies and distribution channels could be shared. Strategic challenge is to exploit all three sources of global competitive advantage scale economies, national differences, and scope economies to optimize global efficiencies, multinational flexibility, and worldwide learning. Efficiency is the value of outputs to the value of inputs. Efficiency can be enhanced by increasing the value of outputs, lowering the value of inputs, or doing both. Efficiency improvement is not just cost reduction; it is revenue enhancement as well. A worldwide company faces an operating environment characterized by diversity and volatility.
