STRATEGY 411 Lecture Notes - Lecture 5: Brokered Programming, Business Logic, Competitive Advantage
Document Summary
Competitive advantage - the value chain and your p&l. Competitive advantage: creating superior value- compared with rivals, you operate at a lower cost, command a premium price, or both. In gauging competitive advantage, returns must be measured relative to other companies within the same industry, rivals who face similar competitive environment or similar configuration of the 5 forces. Performance is measure on business-by-(cid:271)usi(cid:374)ess (cid:271)asis (cid:449)here (cid:272)o(cid:373)petiti(cid:448)e for(cid:272)es operate/competitive advantage is won/lost. To produce g/s whose value exceeds all of the inputs costs (use resources effectively) Return on invested capital (roic): weighs company"s profits vs. company"s invested capital-- Lt roic tells you how well a company is using its resources. Corporate strategy: business logic of a multiple-business company. Whys so few companies are able to maintain successful strategies- Return on sales is used widely- ignores capital invested in the business and is a poor measure of how well resources have been used.
