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Topics Covered
- Transaction-based competition
- Competing in different domains
- The influence of past transactions
- Consumer decision making
- Alphabet case study
- Android case study
Talk Citation
Ward, A. (2023, April 30). Understanding competitive advantage [Video file]. In The Business & Management Collection, Henry Stewart Talks. Retrieved December 6, 2024, from https://doi.org/10.69645/QVGQ4883.Export Citation (RIS)
Publication History
Other Talks in the Series: Strategic Management: Theory and Practice
Transcript
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0:00
My name is Andrew Ward.
I'm a professor at Lehigh
University and this talk is
titled "Understanding
Competitive Advantage".
0:11
Competitive advantage is
the central concept in
strategy. It's the concept which
all other models and
frameworks and concepts in
strategy revolve around.
But what does it actually
mean to say that
a firm has competitive
advantage?
How do we think about
what that means?
Is it an all-or-nothing,
construct? Is it
that firm A has
competitive advantage,
but firm B doesn't have
competitive advantage?
What would that mean?
How could we say that a firm
has a competitive advantage
over another firm and yet
that second firm
continues to exist?
They continue to make
sales and they continue
to have customers.
What would that mean
to say they don't have
competitive advantage
over the other firm?
As we think about the construct
of competitive advantage,
it's best to think about
it in terms of how it
impacts individual
transactions with customers.
1:21
Competitive advantage
can be best
understood at the
transaction level.
If we think about how
firms are pursuing
competitive advantage
and what that means,
it is all about engaging in
profitable transactions
with customers.
We have to think
about what leads to
those profitable transactions
and what leads at
any given transaction to
the customer choosing
firm A over firm B.
We can think about
competitive advantage in that
moment of the transaction.
To say that in this
particular transaction,
firm A engaged in the
transaction with the customer,
firm B did not engage in
the transaction
with the customer.
Therefore, firm A,
for this transaction, had
competitive advantage
over firm B.
Now that's not to say that
the next time a customer is
making a choice
between firm A and
firm B for a transaction,
that customer doesn't
choose firm B over firm A.
In which case, in that
particular instance,
for that particular transaction,
firm B would have competitive
advantage over firm A.
We can't really think about
competitive advantage as being
an all or nothing construct.
We can't say that
in all instances,
firm A has competitive
advantage over firm B
because sometimes firm A
may win that transaction,
sometimes firm B may
win that transaction.
Competitive advantage is
really the aggregate of
the multiple
transactions that the
firms engage in with
their customers.
If a firm engages
in a transaction,
specifically a profitable
transaction with its customer,
it can be said to have had
competitive advantage in
that transaction against
all other firms that
might have been
competing for that
transaction or
that the consumer was
considering in making
that transaction.