Creating Value With Customer-Driven Innovation

Topics: Strategic management, Management, Knowledge Pages: 6 (2210 words) Published: October 21, 2013
Question
Discuss critically on how to create sustainable competitive advantage through Strategic Management When a certain company or organization wants to possess sustainable competitive advantage in the product or services, first of all the company must focus on the core competencies. Core competencies is the things you can do better than your competitors in the critical, central areas of the company where the most value is added to company;s products. If a core competencies yields a long term advantage to the company, it is said to be a sustainable competitive advantage. A good core competencies is the one that able to open doors to other opportunities and able to represent such a unique blend of tacit and explicit knowledge that it cannot be copied by competitors. Core competence can help product and services to create a new products and services that provide potential access to a wide variety of markets, makes a significant contribution to the customer value, enables a business to deliver a fundamental perceived customer benefits of the end product. To find a good core competencies, one must first examine company’s resources and capabilities. If the company have sufficient resources and necessary capabilities that can generate good core competencies. If the company successfully implement a good core competencies, they can create a superior value creation. One of the important element that a company must possess in order to get a sustainable competetive advantage is, practice a distinctive capabilities. Distinctive capabilities is the characteristics of the company which cannot be replicated by competitors, or can only be replicated with great difficulty which are the basis of sustainable competitive advantage. Distintive capabilities can be of many kinds, intellectual property rights, exclusive licenses, statutory monopolies, strong brands, leadership, tacit knowledge and skills, teamwork, organizational culture, business processes and partnerships. An intellectual property right is an advantage to increase competitive advantage. An intellectual property is a protection and the extent to which the innovator could fully capture the returns varies according to the type of protection used and the nature of product and service innovation. Once an innovator creates a product for example, nover or service, they could either produce and commercialise it themselves via firm formation or contract this innovation out to another firm with the necessary complementary assets to produce it either through licensing or a joint venture. IPR can ensure that company get the benefits from their works and their works are not stolen before they even get benefit from it. Exlusive license is where the licensor agrees not to grant other licenses that have the same rights within the scope or field covered by the exclusive license. Exclusive licenses can help company to have a competitive advantage that other competitor will never have. Customer focus creates competitive advantage, customer focus acknowledges that the more a company understands and meets the real needs of its customers, the more likely it is to have happy customers who come back for more, and tell their freinds. By focusing on customer, company can think from the customer’s point of view while understanding the customer’s agenda, buying cycle and best interests. At the heart of customer focus is the art of listening constructively, customer focus means taking the customer seriously. Studies prove that most of company do not have a systematic approach to their marketing and selling. Company can gain a huge advantage by creating system approach to marketing and selling. When a company create a system, they will put a lot of thought into the process. This will helps them prepare for all situations they might encounter when selling. With a system, marketing and selling process breaks down into small steps, its easier to see the problems and bottlenecks and its harder to get off...
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