Hi, welcome to the class on operation strategy,
and competition and competencies specifically about trade-off curves.
In this class, what we are going to try to do
is we're going to try to think about how firms
need to think about their competitive cost advantage or specifically,
we're going to ask several questions and try to answer them.
We're going to ask, why competitive cost understanding is so important to firms?
We're going to use what we call an internal view.
This view should complement the more external view from an investor point of view.
We're going to ask how to analyze competitive cost threat.
We're going to use cost advantage analytics and trade-off curves.
Finally, we're going to try to see how a firm can design
strategies to improve competitive advantage through the operations.
The key question will be whether
a firm's position is defensible using their operations strategy;
their current operations strategy.
If it's not, what changes should the firm make in trying to improve
its ability to defend its position or possibly attack a different firm in their position.
We're going to do this class and we're going to discuss
these frameworks in the context of the case.
The case is Sugar & Spice.
So in order to deal with this case, so we can discuss how to apply this framework,
it's good that you read this case in advance and familiarize yourself with the numbers.
Familiaize yourself with the main strategies of
the main players and understand, what are the key questions?
There are two competitors in this market.
The main competitor we are going to discuss is Sugar & Spice.
Sugar & Spice is a competitor isun the high end cupcake market.
They're going for relatively high cost,
yet extremely high customizations.
They produce the cupcakes for OSCAR party,
for a launch party of different TV shows.
They utilize their connections within the industry to
get these customers and to be able to customize that to them.
However, as I said, in the higher cost.