SOC SCI 198 Lecture Notes - Lecture 6: Costco, Linkedin

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9 Feb 2017
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EC:$Linkedin$
Means$of$measuring$your$idea$
Team$
Resources
Market$
Idea
4$Corners$
§
Why$should$the$customer$purchase$from$this$operation$rather$than$the$
competition?
Increased$perceived$value$
§
Decreased$costs$
§
Costco$does$not$have$competing$brands$=-because$
they$beat$up$both$the$venders$
®
Then$they$dont$pay$them$for$a$while$
®
This$is$why$Costco$wins$because$they$are$masters$at$
decreasing$cost$
The$value$of$the$brand,$many$times$they$are$made$in$
the$same$place$
®
Perceived$value-why$people$by$the$brand
Ask$if$you$are$increasing$the$value$or$decreasing$the$cost$
Distinctive$competencies$(resources,$capabilities)->$cost$advantage$
or$differentiation$advantage->$value$creation$
§
Porter's$competitive$advantage$Model$
Product$features$and$benefits$
§
Location-movie$theater$
§
Staff
§
Operating$procedures-Amazon$returns$super$easy$
§
Price-just$to$differentiate$yourself$not$a$comparative$advantage$
§
Customer$Incentive$programs$
§
Guarantees$and$warranties$
§
Brand$name$recognition$
§
Goodwill$
§
Value-added$product/service$
§
Extended$supply$
§
Organization$and$alliances
§
Quality$
§
Sample$of$potential$strategies$for$differentiation$
How$to$create$an$unfair$competitive$advantage$
Unethical,$illegal,$fraud$
Just$because$you$sink$doesn’t$make$your$competitor$advantage$unfair$
A$business$model-the$model$it$self$it$not$an$advantage,$its$about$how$you$
execute$it$
But$on$its$self$isn't$not$its$fair$
§
Patent-it$will$decrease$cost$because$you$own$it$you$dont$have$to$pay$a$
fee$on$it$
An$idea-its$fair$game$
If$you$know$someone$$that$can$buy$it$
®
On$the$sales$side$a$UCA$renders$the$cost$advantage$and$or$
perceived$value$advantage$of$your$competitors$moot$
If$you$know$someone$that$can$do$it$for$you$and$you$can$
get$a$good$deal$
®
And$or-on$the$supply$side$a$UCA$established$or$enhances$
your$cost$advantage$and$or$perceived$value$advantage$
Both$seem$unfair,$irrational,$undeserved$and$inexplicable$ to$
your$competitors$
This$happens$all$the$time$
UCA$is$trusted$relationship$
§
What$is$an$unfair$competitive$advantage$
What$isn't$an$unfair$competitive$advantage$
Family
Friendship$
Face$to$face:$build$time$together$
Fraternity:$affiliation$groups;$common$bond$
Faith:$really$big$$
Forever:$the$longer$the$better$
Building$$a$trusted$relationship$
More$quick$things$when$starting$with$relationships$then$with$
the$idea$$
Choose$a$relationship-centric$venture$instead$of$an$idea-centric$
venture
§
Ideally,$choose$the$right$market$based$upon$your$relationships$
Decide$on$sales$side$or$supply$side$UCA$or$both$
Build$relationships,$not$contacts$
§
Character$
Relationships$
Energy$
Capability$
Hire$based$upon$
§
Grow$the$relationship$base:$
Building$unfair$competitive$advantages$
Lecture'6-Week'3
Thursday,$January$ 26,$2017
3:35$PM
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