‘” ;  J '. J  .  ,,  if?  -;.- iv}
.   ' eifl
 '  ~ .;       g;
é  ‘  5.3751
1 B . L I St t ' ‘ 7
LEARNING OUTCOMES
After reading this chapter you should be able to explain:
o Different bases of achieving competitive advantage in terms of ‘routes' on
the strategy clock.
o The meaning and importance of differentiation strategies.
o The relationship of differentiation strategies to core competences.
o The extent to which competitive advantage is sustainable.
o When co-operation rather than competition makes sense.
0 The principles of game theory in relation to business strategy.
o The implications of hypercompetition to competitive strategy.
___—____________—_
l
l 7.1 INTRODUCTION
l
l . . . . . .
l In Chapter l the idea of the busmess unit (or SBU) was introduced as a part of
i an organisation with a distinct external market for goods or services. In most
organisations there are a number of business units. Clearly this is so in a large,
maybe multinational. corporation where business units may be defined by
product, service or geographical region. But even a small business is likely to
be competing in different markets, which have different needs, and very likely
with different products or services. In the public sector too there are the equiv-
alent of business units; for example, the different services provided by local
government and the different courses (undergraduate. postgraduate, distance
learning and so on) offered by universities.
This chapter is concerned with the bases of strategic choice at this level;
in particular, if it is possible to generate levels of profit (or as a public sector
, equivalent, best-value services) such that they are not eroded by competi-
‘ tion. This is sometimes referred to as the generation of ‘rents', ‘superprofits‘ or Rents fESU't from an
. ‘economic profit’. Such rentsl (or more strictly Ricardian rents) result from an OWN-$2299 havtznghresources

Free Online OCR newocr.com