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0:00
Hi, I'm Allen Amason the Dean of
the Parker college business
at Georgia Southern University,
Professor of Management
and author of
the textbook from
Strategic Management
from theory to practice.
I am talking in this session
about different types of
competitive advantage.
0:20
Competitive advantage is the
crux of strategic management
that the singular focus
of the strategic manager,
Peter Drucker famously once
said that the purpose of
a business is to create
a satisfied customer
who will do business with the
firm over and again because of
their satisfaction will
spread the news of
business because of their
satisfaction will of course,
increase the businesses
customer base and increase
the businesses grave engagement
across its various
potential customers.
To do that, what a
strategic manager looks to
do is to increase
competitive advantage,
to increase the value that
the customer sees in the
transaction and increase,
of course, the demand
for the firm's
product or services.
1:03
The question arises about
competitive advantage.
Are all competitive
advantages made the same?
Are all competitive advantages
done in exactly the same way,
or are there different types
of competitive advantage?
This question arises
because it really is
an old discussion in the
strategic management discipline.
It's one that goes all the
way back to the origins of
the discipline and the
work of Michael Porter,
where he described a
simple typology of
three types of competitive
advantage in his 1980 work,
those three types who are
low cost, differentiation
and focus.
Now, these concepts, of course,
are still very
commonly used today.
This typology, these
three types are
still commonly heard
in the lexicon of
strategic management
and commonly
discussed by business
managers and academics alike.
But the terms themselves
have become so common,
are so simple really
in their elegance.
Sometimes we can lose
sight of what they
really represent.
When we do lose sight
of what they represent,
it undermines the
power of the concepts.
I wanted to talk about
them briefly and just help
if I could, listeners
of this talk to
understand what these types of
competitive advantage
really represent and
clarify the implications of
what they really
mean for a business.
