2.3 TQM linked with Competitive Advantage Competitive advantage is a mastered key element that gives an edge to a business beyond what already exists in competition (Ehmke, 2008). Porter (1980) believed that competitive advantage is created through operations at either a relatively low cost or differentiation. Either way, a firm requires excellence on an aspect in order to gain competitive advantage. Competitive advantage denotes a firm’s ability to achieve market superiority. In the long run, a sustainable competitive advantage provides above-average performance.
Also, Collins provides three essential criteria for the beneficial result of the stated process. The first is to recognize what is the most prominent advantage of a firm and what it can do best. Moreover, it is also worth understanding what is the most disadvantageous feature of an organization as well. The second is the determination of the process which drives the economy of a company. The things one is to acknowledge the passion of an organization or what is the primary motivation of a
In particular, the effects of decreasing marginal utility and consumer heterogeneity across market segments is shown to affect the sustainability of competitive advantage through shifts in consumer willingness to pay. Competitive advantage definition :The authors define competitive advantage as superior value creation -- with the firm's ability to sustain competitive advantage equivalent to its ability to sustain added value. 2.Reference collected from Adner and Zemsky (2007). The demand-side drivers are 1) marginal utility from performance improvements, 2) consumer taste for quality, and 3) the extent of consumer heterogeneity. At the level of firm resources, competitive advantage erodes not only because imitation undermines the uniqueness of resources, but also because consumer valuation of firm differences declines due to effects of decreasing marginal utility.
Competitive advantage was developed by Porter to enable organizations sustain their ability to improve performance and be more innovative in their approaches in enhancing the quality of their products. The essence of competitive strategy is to enjoy superior profit margins and remain competitively relevant in the marketplace to attain success (Porter, 1985). Therefore, competitive strategies that are used mostly in business organisations, including construction businesses, as categorised generically by Porter, are to strive to be the industry’s low-cost producer through cost-based business strategy, practice different strategies based on quality, superior performance or technological dominance and concentrate on a market segment using a focus strategy to achieve a competitive advantage by performing better than their competitors in providing more value to the product required by the buyers. Porter (1980, 1985) identified two strategies: product differentiation and cost leadership. A differentiation strategy involves the firm creating a product or service.
joint ventures to provide critical functions that will allow to enhance its core capabilities that drive competitive advantage in the industry. To further ensure (i.e. continuity) more decisions are made objectively and based on factual basis, the company must look at the three stages: 1. Components Identification of Core of the Core These components show what the company does better and cheaper than its competitors. Thenceforward, whether an ability was proprietary and if it was common that 3rd parties could achieve the intended scale.
Moreover, companies must search for an adequate level of corporate social responsibility for their future development. Most times, profitability and responsibility are in conflict, resulting in management decisions directed toward one of the two concepts. companies must be profitable to survive and big corporates need to generate at a rate of return that exceeds its cost. This rate of return should be higher than the interest obtained in the case of risk free bank deposit in order for business development to exist. Improve profitability, and consequently a good income leads to investor confidence, reflected by increasing the stock’s demand, which makes it easier to achieve long-term business goals.
A variety of definitions can be found in literature on the subject of teams. Teamwork has been defined by Hageman, (1995) as a way to produce permanent and constant clarifications to the crisis, collectively with people who decide together in joint decision-making. People are motivated through innovative and participatory methods in teamwork. If team members cannot be motivated sufficiently in line with the targets of growth and development, the members of the team cannot exist in an efficient and productive working environment. One of the key motivational factors is a person 's sense of belonging to a group and a goal.
PHG is a company with low cost strategy, and therefore, operational excellence and cost controls are its major strategic performance drivers. A company has a competitive advantage when it is able to create more economic value than its competitors (Lepak & Gowan, 2010). However, the key strategic performance driver for this low cost strategic organization would be the cost control. This driver best translates PHG’s strategic objectives into actionable activities; the source of a company’s competitive advantage must be translated into strategic performance
Their strategy has ensured the firm has a strong competitive advantage but a sustainable competitive advantage. Sustainability rests on three pillars namely: Durable resources and capabilities, that will not be eroded quickly ( as cited above) the ability to protect competitive advantage, the ability to develop a steady stream of new sources of profit (dynamic capabilities). Protecting Competitive Advantage Once competitive advantage has been established it is pertinent for the firm to protect its competitive advantage in order to ensure the advantage is sustained over a time. According to Porter sustainability can be achieved when advantage resists erosion from competitors, due to barriers that make imitation impossible. It has been further argued that competencies that cannot be understood by competitors are difficult to imitate.
This is very important because this criterion turns the eyes of the company outside the organization and towards the customer. Furthermore, it enhances the specific role of the marketplace in a successful project. Verzuh in The fast forward MBA in project management (2004) agrees that the golden triangle is enough to define success. Except from time and cost parameters he mentions high quality. Verzuh links quality with the outcome of the project that must have two components: functionality (what the project is supposed to do) and performance (how well the functionality