(3, 1) - Pursuing Competitive Advantage Flashcards Preview

CIPS AD3 - Improving the Competitiveness in Supply Chains > (3, 1) - Pursuing Competitive Advantage > Flashcards

Flashcards in (3, 1) - Pursuing Competitive Advantage Deck (11)
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What did Porter argue are the three strategies which can be used, at business level, to be successful and achieve competitive advantage?

Cost Leadership (lowest price in the industry)
Differentiation (products or services perceived as unique e.g. Rolex / Apple)
Focus (tailors to meet a particular target market)


What are the major sources of differentiation?

Functional features or designs
Reputation, branding and image
Availability, such as timings and location
Sales promotion activities or good advertising


What different approaches are there to achieve differentiation?

Innovation (Apple)
Brand Image (Apple, Coca-Cola, Nike)
Customer Care (Amazon)


One approach to differentiation is innovation, how can innovation give your company an advantage over its competitors?

Spotting new ideas
Recognising market opportunities
Converting new ideas into products and business processes
Getting new products to market more effectively
Securing patents
Marketing new ideas to ‘early adopters’


Supplier Relationship Management (SRM) is a way of achieving competitive advantage. What ways can suppliers contribute to profitability?

Value for Money – collaborating on cost reduction programmes
Quality – through reliability
Product and Process Innovation – utilising their experience
Market Information – particularly from service providers
Risk Management – through better information on each other
Efficient Processing – through shared systems
Improved CSR / Reputation – through control over ethical practices in the supply chain


What is the Kraljics Matrix for deciding importance of suppliers to a buyer?

It contains 4 quadrants (Acquisition, Bottleneck, Leverage, Strategic) based on risk and value of purchases.


When building a relationship with a strategic supplier, what stages are there likely to be in the development of the relationship?

Set Up – (3/10 strength of relationship) lots of enthusiasm and common cause, not sure what’s required at this stage.
Patience – (2/10) time for clarifying roles and responsibilities while the cultures become apparent. Frustration at slow progress and slight differing priorities.
Making Progress – (5/10) benefits start to appear and it begins to feel like “we” and not “you”
Working Well – (10/10) partnership priorities prevail, trust develops and delivers key benefits.
Decline – (1/10) the relationship has run its course and achieved its aims or it has become complacent / ceases to be profitable.


To build a good relationship the parties need to meet. What joint activities might you do?

Supplier summits – bringing all strategic suppliers together to share the company’s strategy, provide input to its ideas generation and solicit feedback and suggestions
Executive to executive meetings – aligning the companies highest level and sharing long term goals
Strategic business planning meetings – relationship leaders and technical experts meet to discuss opportunities
Operational business reviews – individuals responsible for day-to-day management review progress on current initiatives


What two qualities are required to rebuild trust after it is broken?

Commitment (openness and honesty) and Consistency (responding quickly)


Selecting potential partners requires a thorough assessment of the compatibility of cultures as well as their fit to your organisation. What role might an independent facilitator play?

They would attend a launch meeting which would include all key personnel. Here you should agree the Contract and the Partnering Charter (Management Arrangements).


What are the principles of good partnering?

Concentrate on generating and adding value
Be open – do not unleash suprises
Support each other
Do not deviate from decisions made by the partnership
Communicate effectively and often
Focus on continually improving the effectiveness of the partnership
Clearly explain expected standards of work and behaviour
Identify potential or actual conflicts and take prompt action to resolve
Keep learning, develop common knowledge and skills