(TIỂU LUẬN) TIỂU LUẬN môn quản trị chiến lược explain the relationship between strategic management and competitive advantages

TRƯỜNG ĐẠI HỌC KINH TẾ TP.HCM Khoa kinh doanh quốc tế BÀI TIỂU LUẬN Môn: Quản trị chiến lược GVHD: Lê Thanh Trúc Sinh viên: Nguyễn Huỳnh Bảo Trân MSSV: 31191025645 TPHCM, 11/6/2021 I Explain the relationship between strategic management and competitive advantages Strategic management The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives It allows a business to develop distinctive characteristics to position itself in the market Strategic management is an effective tool to increase business performance and growth Competitive advantages A competitive advantage is a distinguishing characteristic that makes a company more desirable to consumers than its competitors Competitive advantages will help companies and businesses survive and prosper in the market if they have a strategy to take full advantage of this advantage A competitive advantage can arise from a company's capabilities Relationship between strategic management and competitve advantages Strategic management is not a form of competitive advantage, but it can help create competitive advantage or maximize competitive advantage Strategic management enables a company to develop unparalleled competencies such as marketing, design and manufacturing These competencies can enable a company to create a competitive advantage The company has a competitive advantage compared to competitors and having a right strategy and decision will maximize those advantages, helping the business to prosper Relationship optimization To get the most out of the relationship between strategic management and competitive advantage, a company should start with deciding what kind of competitive advantage it wants to gain and then develop the necessary competencies For example, if they want to create a competitive advantage on low prices, they will need to invest in developing their capabilities in efficient manufacturing, supply chain management, and lean manufacturing II How can a firm achieve sustained competitive advantage? In general, when an enterprise maintains its profitability and growth rate very high or above the average level of enterprises in the industry for a long time, it is considered to have a competitive advantage sustainability (Porter, 1985) Barney (1991) established four criteria, also known as VRIN model (Valuable, Rare, Imperfectly imitable, Non-substitutable), to determine the sustainable competitive advantage of enterprises in the market The four criteria to evaluate the competitive advantage of enterprises are associated with the following four questions: Is it worth it? Does the advantage allow the business to come up with strategies to improve efficiency or performance? Otherwise, the business cannot achieve profits above the market average Enterprise resources can only create competitive advantage or sustainable competitive advantage for the business when they are valuable Resources are valuable if they enable an organization to implement strategies to improve business performance and efficiency by exploiting opportunities and/or neutralizing threats in the operating environment of the enterprise; Is it rare? If many other businesses can own it, the advantage is not uncommon and can be deployed by competitors Resources must be scarce and hard to find in competitors, otherwise the advantage created from that resource will quickly be imitated by competitors In fact, it is difficult to know whether the firm's valuable resources are entirely unique to the firm's competitors, and these resources will create at least an advantage competition and may have the potential to create a sustainable competitive advantage However, there may also be a small number of firms in an industry that possess a valuable resource of its own and also confer a competitive advantage In general, as long as the number of firms possessing resources of exceptional value is less than the number of firms required to create an impetus for perfect competition in the economy (Hirshleifer, 1980), those resources are the potential to create competitive advantage; Is it difficult to imitate? Are the historical conditions unique, cause-and-effect relationships unclear, and/or complex social? Otherwise, it will be easy for competitors to imitate and implement the same; The profit of the enterprise will gradually decrease to the market average Resources must not be perfectly imitated to ensure a sustainable competitive advantage Otherwise, within a short period of time, competitors will all have the resources needed to implement the same strategies as the business According to the mechanism of preventing resource conversion above, when the connection between an enterprise's resources and its sustainable competitive advantage is only limited, it will be difficult for competitors to copy The imitators may describe some of the resources of the successful firm, however, it is not clear that the resources created are the same as those that create a sustainable competitive advantage for business or not; Are they replaceable? If so, competitors can easily replace them with other similar or superior advantages to gain advantage and earn high profits for the business Although one firm's competitors cannot exactly imitate another firm's resources, it is still possible to substitute a similar resource that allows the same strategy to be exercised by the firm owning the particular resource Therefore, only when the nonsubstitutable characteristic is proven can a new resource ensure a sustainable competitive advantage of the enterprise When all four of these criteria are met, the business is said to have a sustainable competitive advantage In other words, the business will have an advantage in the market and will last until one of the above criteria is no longer met During the time when the above four criteria are satisfied, the business will achieve higher profits than other competitor businesses In the current context of competition and international integration, in order to develop a sustainable advantage, enterprises can focus on a number of key factors as follows: Customer loyalty is achieved when a customer commits to purchase goods and services from a particular retailer This can be done through retail branding, positioning, and loyalty programs Location is an important factor in consumers' choice of stores Starbucks coffee is an example They “occupy” a prime area of a city for a time and then expand into the region They open stores close to each other and use storefronts to advertise their businesses; they very little media advertising due to the strategic location which is enough for branding and self-promotion Information and distribution systems: Walmart has omitted this part of its retail strategy Retailers strive for the most efficient and productive ways to get products cheaply and sell them at reasonable prices Distribution is extremely expensive and time consuming Exclusive Merchandise: Private Labels are products developed and marketed by a retailer and offered only by that retailer Commercial Relationships: Developing close relationships with suppliers can achieve exclusive rights to sell a product in a particular area and a small number of other popular products Customer Service: It will take a long time to set up, but once it is established it will be difficult for the competition to develop a competitive reputation Multi-source advantage is the advantage gained from many different sources For example, McDonald's is famous for its fast, clean, and hot food They have cheap meals, nice facilities, good customer service with a reputation for always delivering fast and hot food III Explain in detail your mind map (7steps) of my project Step 1: Vision The company's vision represents the goal that the company wants to achieve in the future as well as promoting the company's competitive advantage as a travel app that provides services from AZ to customers - an application that is still rare in Vietnam Vietnam and the company also want to lead in travel apps in the near future “On the basis of sustainable formation and development, within 10 years HAHAHA aims to become a leading enterprise in the field of tourism in Vietnam, combining technology application In addition, the company will develop and perfect its technology application, bringing it to the top of the most popular travel application in Vietnam.” Step 2: Mission The company's mission is to convey the wild beauty of the mountainous region in Vietnam through combined with a convenient travel application, serving customers from AZ that few travel companies in Vietnam currently have Now we can it, helping customers to enjoy the trip in the most comfortable way without having to worry about prices, means of transportation, Because all have the company's integrated travel app to help: “HAHAHA wishes to connect and lead to bring interesting travel experiences to customers From there, convey the unique beauty of the S-shaped land to domestic and foreign tourists Making the most of technology applications to bring Vietnamese tourism to a new level Customers will be provided with an experience travel package from A-Z with many new utilities developed from our application.” Step 3: Slogan Here to get you there This is the company's slogan, concise but expressing what the company wants to bring to customers The slogan shows that our company's staff is always ready, always available anytime, anywhere to bring customers to experience interesting trips, and we, through the travel app, are always accompanies and solve problems for customers from booking, car rental to tracking tour itinerary - all fully integrated in one application and so customers will be able to enjoy their travels with peace of mind Step 4: Competitive advantages The company has determined for itself a competitive advantage, a travel app that fully integrates the necessary features, provided from A-Z for the entire route from tour reference, hotel, vehicle, online payment and detailed schedule tracking helps tourists understand and be flexible in their own travel This is a fairly new idea when almost the current market only has its own apps specializing in booking, booking a car, etc The integration of these features will bring more convenience to tourists.That is a difference compared to the current tourism businesses in Vietnam A travel app like this is almost rare and has almost never appeared in Vietnam, so this is a huge competitive advantage for the company And based on this advantage, the company will come up with appropriate strategies to build a sustainable competitive advantage in the future, widely disseminated throughout the territory of Vietnam, thereby creating a new field in the future Step 5: Long-term Objective To achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven Profitability Productivity Competitive Position Employee Development Employee Relations Tech Leadership Public Responsibility There are five criteria that should be used in preparing long-term objectives: Flexible Measurable Motivating Suitable Understandable Identifying its competitive advantage and realizing that it can be easily copied by its competitors, the company will set long-term goals to capture this new market before other competitors enter this field, creates a sustainable competitive advantage for the company, the company has set long-term goals based on the company's capabilities and the current market situation Some of the long-term goals that the company sets in the future are: In the next years, the company's travel app will become a well-known travel app The company wants the app to become popular throughout the territory of Vietnam, creating a new form of travel access for guests At the same time, in the next years, it will account for 15-20% of the number of tourists who want to approach and enjoy highland tourism When people want to travel, they will immediately think of this app This is the goal that the company wants to achieve in the long term Target revenue growth from 15-20% over the years, maintain at least 7080% positive customer feedback The company will constantly improve the app and integrate more new features for travel so that the app becomes a popular app It can be seen that the long-term goals that the company sets are all strong and focused on the competitive advantage that the company has previously identified The company's long-term goals are achieved in of the regions including profitability, productivity, competitive position, tech leadership and public responsibility The goals also meet the criteria Goals are flexible, easy to adjust when risks arise, have specific metrics that are easy to measure, motivating employees and very suitable, easy to understand These goals are to create a sustainable competitive advantage, hard to replace, hard to copy because when the company achieves these goals, the app as well as the company brand has become quite popular in the field tourism combined with technology, occupies a relatively high market share and creates advantages for the first Step 6: Generic Strategy A long-term or grand strategy must be based on a core idea about how the firm can best compete in the marketplace The popular term for this core idea is generic strategy There are three generic strategy - Low-cost leadership: Low-cost producers usually excel at cost reductions and efficiencies They maximize economies of scale, implement costcutting technologies, stress reductions in overhead and in administrative expenses, and use volume sales techniques to propel themselves up the earning curve A lowcost leader is able to use its cost advantage to charge lower prices or to enjoy higher profit margins Differentiation: Strategies dependent on differentiation are designed to appeal to customers with a special sensitivity for aparticular product attribute By stressing the attribute above other product qualities, the firm attempts to build customer loyalty.Often such loyalty translates into a firm’s ability to charge a premium price for its product The product attribute also can be the marketing channels through which it is delivered, its image for excellence, the features it includes, and its service network -Focus: A focus strategy, whether anchored in a low-cost base or a differentiation base, attempts to attend to the needs of a particular market segment A firm pursuing a focus strategy is willing to service isolated geographic areas; to satisfy the needs of ustomers with special financing, inventory, or servicing problems; or to tailor the product to the somewhat unique demands of the small- to medium-sized customer The focusing firms profit from their willingness to serve otherwise ignored or underappreciated customer segments The generic strategy pursued by the company is differentiation Differentiation requires that the business have sustainable advantages that allow it to provide buyers with something uniquely valuable to them Differentiation usually arises from one or more activities in the value chain that create a unique value important to buyers Our company provides services entirely through the application Customers can book tours, in addition to not being restricted on the schedule, we will give suggestions on places to visit, eat, and stay so that customers can choose where they want to go Personalize the needs of customers, based on the requirements of customers, we will consider and design the tour accordingly A fully integrated technology app is not common and almost very few Vietnamese travel companies So this is a huge competitive advantage for the company The differentiation strategy is the one that works best for the company In the future, the company will strongly promote this difference in the market to attract customers, dominate the tourism market, and create a new, interesting and safe way of travel Strategists use benchmarking and consider the forces in considering differentiation Inbound Logistic: The company provides new services and interesting experiences for customers when the preparation and management of a tour are done through a single app Bringing visitors to the most beautiful tourist destinations so that visitors can fully feel the beauty of the mountainous region in Vietnam Operation: The company is constantly improving, integrating the application to satisfy more needs of customers, always listening and solving customer questions and complaints Constantly improving and expanding the company's staff to become more and more professional and enthusiastic Outbound Logistic: The company searches for and cooperates with the most prestigious and quality resorts, restaurants, hotels in the region as well as quality and reasonable means of transportation to bring the most comfortable travel experience for customers Marketing and sales: The company will advertise its travel application on media such as google, youtube, tiktok and hire influencers, celeb to advertise the company's application Service: Hire technicians to manage and operate the application to avoid errors There are staff who are always ready to solve customer’s questions Step 7: Grand strategy In the next 5-10 years, the company will follow strategies which are Concentrated growth Concentrated growth is the strategy of the firm that directs its resources to the profitable growth of a dominant product, in a dominant market, with a dominant technology Concentrated growth strategies lead to enhanced performance Specific conditions favor concentrated growth The risks and rewards vary So, focus resources on profitable application growth, in a strategic market, with a technology in which the company has an edge 10 Product Development Product development involves the substantial modification of existing products or the creation of new but related products that can be marketed to current customer through established channels So, we will Improve the application through customer surveys, to bring a more enjoyable experience for users when using the app, always updated with the most advanced and modern features Develop tours based on the different needs of customers, expanding tourist destinations throughout the territory of Vietnam Apply technology to develop towards complete digital transformation of all management, administration and business activities of enterprises for more effective management Market development Market development commonly ranks second only to concentration as the least costly and least risky of the 15 grand strategies It consists of marketing present products, often with only cosmetic modifications, to customers in related market areas by adding channels of distribution or by changing the content of advertising or promotion Frequently, changes in media selection, promotional appeals, and distribution are used to initiate this approach Company's market development strategy: Marketing the company's tour booking application to potential customers related to the market area to further develop the company's market share by advertising on social networking sites, media Hire current influential celebs to advertise or represent the app to increase public awareness Regularly change and update advertising content to suit the needs of the market 11 These strategies are suitable with the company's competitive advantages as well as the current market situation of the tourism industry, so in the long-term, it will help the company achieve its long-term goals 12 13 ...I Explain the relationship between strategic management and competitive advantages Strategic management The set of decisions and actions that result in the formulation and implementation... capabilities Relationship between strategic management and competitve advantages Strategic management is not a form of competitive advantage, but it can help create competitive advantage or maximize competitive. .. get the most out of the relationship between strategic management and competitive advantage, a company should start with deciding what kind of competitive advantage it wants to gain and then