Business Plan Preparation Frank Moyes Leeds School of
Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado Competitive Advantage 1
Identify Your Resources n n n Human: social, employee knowledge, experience, accumulated wisdom, labor cost and skills, etc. Intangible: patents, trade secrets, know-how, copyrights, databases, etc. Organizational: culture, contacts, policies, Boards of Directors & Advisors, suppliers, service providers, etc. Financial: access to capital (equity & debt), cash reserves, government grants, etc. Physical assets: plant & equipment, raw materials, location, working capital, etc. Competitive Advantage 2
Identify Your Capabilities n n n n Network - well developed, high-quality, accessible contacts that take years to build Marketing - differentiation, branding, positioning Product/service - design features & benefits Sales & distribution - rep organization Total operational approach - Dell, Wal-Mart Supply chain management - Asia contacts Relationships - regulators, politicians, investors Competitive Advantage 3
Barriers You Can Establish Intellectual property n Switching costs to your target customer n Customer loyalty n Agreements with customers, suppliers, strategic partners n Control of the distribution channel n Competitive Advantage 4
Competitive Advantage Challenges n n n n Intellectual property Agreements with customers or suppliers Long term contracts Control of costs Control of prices Control of channel Location Differentiation Competitive Advantage n n n n n First to market Intellectual property World class management Development lead time Brand Quality Service Execution Relationships 5
Sustainable Competitive Advantage Differentiation n Innovation n Resources & capabilities n Really understand the market & competition n Why is this so hard? Competitive Advantage 6
Competitive Advantages Difficult to Sustain Most are easily copied n Must be intellectually honest n n n Entrepreneur not realistic about own resources & capabilities Entrepreneur ignorant of or ignores competition Entrepreneur ignores future Market, competition, resources, and capabilities are continually changing Competitive Advantage 7
A Model of Competitive Advantage Resources Distinctive Competencies Cost Advantage or Differentiation Value Creation Capabilities Competitive Advantage 8
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