Strategic Competitive Advantage

JWI 540 Strategy Week2 Summary     7/15/12
Jack Welch Management Institute

The following are my key takeaways this week.

1. Vital Leadership skill to develop
***************************************
Identify and target high-growth industries & exit stagnant or declining industries

2. Growth is the best option - Energize the whole place
***************************************************************
Growth takes care of a number of issues - better jobs, more jobs, more returns for employees and shareholders, give back to communities
If you see a good deal, pounce on it - grow organically or through M&A

3. Michael Porter's 5 Forces framework
*********************************************
Rivals: How large are your competitors? many or few? how mature are they in the space ? in what ways are you better or different ?
Suppliers: Supply chain suppliers large and too few ? many small players predominate ? which critical types of goods most scarce ?
Customers: fragmented? dominant buying group ? switching costs ?
Substitutes: indirect competition
New Entrants: be on lookout for new competitors who might steal your customers

4. Determine your source of competitive advantage - your company's identity
****************************************************************************************
Assets: What do we have that rival don't have ?
Capabilities: What can we do that our rivals can't?

Use your capabilities and assets in a way that
(a) creates value (b) is distinctive and unique (c) is difficult or impossible to imitate

Relentless innovation is critical to stay ahead of competition and sustain competitive advantage

5. To make customers stick, shift from transaction model to a long term relationship model
*******************************************************************************************************
- service the hell out of them with incredible experiences
- shift from short term product focus to longer term sustained productivity focus
- leverage the balance sheet to support the customer
- share know-how
- excite user communities

I find these principles to work at multiple levels - at an individual career level, at my business unit level and at my corporate level.

Dr DP