Entrepreneurship

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CC530
Entrepreneurship Biz. strategy
CHAPTER 3. Building a Competitive Advantage
Professor. Taeyong Yang
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Create a vision
Write a mission statement
Figure 3.1 Create a business theory of a new
venture.
State the value proposition
Create the business model
Describe the core competencies and the
competitive advantage
Act to make the competitive advantage sustainable
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TABLE 3.1 Elements of a vision.

• Clarify Easily understood, focused.
• Consistency Holds constant over a time period,
  but is adjustable as conditions warrant.
• Uniqueness Special to this organization
• Purposeful Provides reason for being
• McDonald low priced, fast food in a clean R.
• Google online search that is reliable and fast.

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Payers
Providers and hospitals
Doctors
Healtheon
Consumers
Figure 3.2 Vision for Healtheon
(WebMD) Electronic transaction services to
doctors and hospitals
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Table 3.3 Possible elements of a mission statement

• Core Values
• Competitive advantage
• Customers and/or stakeholders
• Values provided to customer
• Products
• Markets or industry

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Table 3.4 Mission statement of eBay

• We help people trade practically anything on
  earth. eBay was founded with the belief that
  people are basically good. We believe that each
  of our customers, whether a buyer or a seller, is
  an individual who deserves to be treated with
  respect.
• We will continue to enhance the online trading
  experiences of all ? collectors, hobbyists,
  dealers, small business, unique item seekers,
  bargain hunters, opportunistic sellers, and
  browsers. The growth of the eBay community
  comes from meeting and exceeding the expectations
  these special people.

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Table 3.6 Five Values offered to a customer.

• Product Performance, quality, features, brand,
  selection, search, easy to use, safe.
• Price Fair, visible, consistent, reasonable.
• Access Convenient, location, nearby, at-hand,
  easy to find, in a reasonable time.
• Service Ordering, delivery, return, check-out.
• Experience Emotional, respect, ambiance, fun,
  intimacy, relationships, community

Value delivered to the customer results in a
satisfied customer who will pay a reasonable
price in return for the product or service.
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Starbucks Value Proposition

• We provide a friendly, comfortable, well-located
  place offering a wide range of fresh, customized
  quality coffees, teas, and other beverages for
  the person who enjoys a good experience and a
  good beverage.

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TABLE 3.8 Elts of a business model.

• Customer selection Who?
• Value proposition unique benefit?
• Differentiation and control comp. adv?
• Scope of product and activities
• Organizational design
• Value capture for profit
• Value for talent why work here?
• Dell, AA, SWA business models

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Start

• Evolving customer priorities
• New technologies
• Economic conditions

• Select the customer
• Determine the key values of the customer
• Prepare a value proposition

Figure 3.4 Business design process

• Prepare and test a business model

• Implement the business model

• Reevaluate the business model in terms
• of changes in the marketplace

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V-P
P-C
Value, V
Price, P
C
Cost, C
Figure 3.5 Value and return to the customer and
the firm.
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TABLE 3.11 Sources of competitive advantage.
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Sustainable competitive advantage
Strategic assets and innovation
Core competencies
Capabilities Knowledge and skills
Assets Financial, physical, human, and
intellectual
Figure 3.6 Pyramid of value creation.
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TABLE 3.12 Ten types of sustainable competitive
advantage.
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CASE AGRAQUEST

• Vision statement
• Mission statement
• Five values
• Value proposition
• Business model