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0:00
Hello! My name is Robert Grant.
And as part of
the series of talks
on strategic management,
I'm talking about
Competitive Strategy.
0:12
So let me just briefly outline
what I'm gonna be talking about.
Let me start off with
my objectives for this session:
To spend some time outlining
what it is that we mean
by competitive strategy.
And then, to develop
a framework
for analyzing
competitive strategy,
which starts off
where the industry
drills down into the sources
of competitive advantage
and ends up,
in even more detail,
looking at the specific
activities of firms.
0:49
So what I want to achieve
in this talk
is very straightforward.
First of all,
I'd like to introduce
the main concepts and frameworks
used for the analysis
of competitive strategy.
And then I would like to show
how these concepts
and frameworks
could be applied in order
to formulate strategies
that will enhance
the firm's prospects
of achieving
superior performance.
So let me start by saying
a little bit about
what I mean by
competitive strategy.
1:26
One of the basic distinctions
in strategic management
is between corporate strategy
and competitive strategy.
In order to explain
the difference between
those two,
let's go back to what is
the basic purpose of strategy.
The basic purpose of strategy
is to enhance
a firm's performance
over the long term.
Performance we
typically identified
with profit, that for
a firm to survive,
it has to make a rate of profit
that is greater than
its cost of capital.
In simple terms,
the purpose of strategy
is to help the firm
to make money.
How does the firm do this?
One way is by locating
within an attractive industry,
or in simple terms,
we can define that
by answer to the question,
which businesses
should the firm be in?
However, whatever business
a firm finds itself in,
it could also earn
a superior rate of profit
by achieving a competitive
advantage over its rivals.
This is defined by
the answer to the question,
how should the firm compete?
What those two basic sources
of superior profitability
define these two major
areas of strategy?
Corporate strategy is about
the question of which businesses
should the firm be competing in?
The issue of
competitive strategy
is within a specific business,
how should the firm compete?
We can summarize this by
saying that corporate strategy
is about what should
the scope of the firm be?
Whereas competitive strategy,
the key concern there is
how does the firm establish
a competitive advantage,
within its business?
