Strategic management unit ii

Strategic Management
Semester III
UNIT – II COMPETITIVE ADVANTAGE
External Environment – Porter’s Five Forces Model - Strategic Groups – Competitive
Changes during Industry Evolution – Globalization and Industry Structure – National
Context and Competitive Advantage: Resources, Capabilities and Competencies –
Core Competencies – Low Cost and Differentiation – Generic Building Blocks of
Competitive Advantage – Distinctive Competencies – Resources and Capabilities –
Durability of Competitive Advantage – Avoiding Failures and Sustaining Competitive
Advantage
EXTERNAL ENVIRONMENT
Environment of any organization can be considered as “the aggregate of all
conditions, events and influences that surround and affect it”. Environment is
complex as it consists of a lot of factors arising from different sources. The nature of
environment is one of dynamic as it keeps changing continuously. The impact of
environment on organization is deep and far reaching.
Concept of Environment:
Environment literally means the surroundings, external objects, influences or
circumstances under which someone or something exists. The environment of any
organization is the aggregate of all conditions events and influences that surround and
affect it.
Environmental Factors:
Environmental factors can be classified as:
(i) Macro environmental factors and
(ii) Factors which are specific to the given business i.e. task environment.
The constituents of macro environmental factors are demographic environment, socio
cultural environment, economic environment, political environment, natural
environment, technology environment and legal environment. The environmental
factors which are specific to task environment are market, industry competition,
supplier and consumer.
Characteristics of Environment:
a. Environment is Complex:
b. Environment is Dynamic
c. Environment is Multi-faceted
d. Environment has a far- reaching impact
Macro Environmental Factors:
 Demographic Environment
 Technological Environment
 Socio- cultural Environment
S.N.Selvaraj, M.B.A., M.Phil., Assistant Professor, Email: sn.selvaraj@yahoo.com Page 1

 Economic Environment
 Political Environment
 Regulatory Environment
 International Environment
 Supplier Environment
 Task Environment
Forecasting the Environment
Four forecasting techniques are discussed as follows:
 Time Series Analysis: This is an empirical forecasting procedure wherein certain
historical trends are used to predict such variables such as firm’s sales or
market shares.
 Delphi Technique: This is a forecasting procedure in which experts are
independently and repeatedly questioned about the probability of some event’s
occurrence until consensus in reached regarding the particular forecasted event.
 Judgment Forecasting: It is a forecasting procedure whereby employees,
customers, suppliers and trade associations serve as sources of qualitative
information regarding future trends.
 Multiple Scenarios: This is a forecasting procedure in which management
formulates several plausible hypothetical descriptions of sequence of future
events and trends.
Environmental Scanning:
Environmental scanning plays a key role in strategy for emulation by analyzing the
strengths and weaknesses and opportunities and threats in the environment.
Environmental scanning is defined as monitoring, evaluating, and disseminating of
information from external and internal environments to managers in organizations so
that long term health of the organization will be ensured and strategic shocks can be
avoided.
PORTER’S FIVE FORCES MODEL
An industry consists of a group of companies offering products or services, which are
similar and serve as substitutes for each other. Strategies analyze competitive forces
within an industry to indentify opportunities and threats facing a firm. A model for
analyzing the industry environment is developed by Michael E. Porter, an authority on
competitive strategy. This model is known as Five Forces Model and it helps
managers to identify and analyze the competitive forces in an industry environment.
Porter’s Five Forces Model:
The five forces which are focused in this model are:
 Threats of New Entrants
 Bargaining power of Suppliers
 Bargaining power of Buyers
 Treat of Substitute

 Rivalry among Existing Firms
Fig: Porter’s Five Forces Model and Strategic Group
This model focuses on five forces that shape competition within an Industry. Porter
argues that the stronger each of these forces is the more limited is the ability of
established companies to raise prices and ear n greater profits. Within porter s
framework, a strong competitive force can be regarded as a threat because it depresses
profits. A weak competitive force can be viewed as an opportunity because it allows a
company to ear n greater profits. The task facing managers is to recognize how
changes in the five forces give rise to new opportunities and threats and to formulate
appropriate strategic responses.
STRATEGIC GROUPS
An industry consists of number of firms. Firms in an industry, often, differ from each
other with respect to product, quality, customer service, pricing policy, distribution
channel, advertising policy, promotion, target segment and technological change.
Within an industry, a strategic group refers to a set of business units, which ‘pursue
similar strategies with similar resources’. The strategies followed by companies in one
strategic group will be different from the strategy pursued by other strategy group. In
a strategy group, each member company almost follows the basic strategy as other
companies in the group.
Mc Donald, Burgar King and Domino are in restaurant industry and have many things
in common. Haldiram, though in the same restaurant industry, has different mission,
objective, strategies and in different strategic group.
Strategic Groups within Industries
Proprietary group: The companies in this proprietary strategic group are pursuing a high
risk high return strategy. It is a high risk strategy because basic drug research is
difficult and expensive. The risks are high because the failure rate in new drug
Threat of
Potential Entrants
Rivalry among
Established Firms
Threat of
Substitutes
Bargaining power
of Supplier
Bargaining power
of Buyers

development is very high.
Generic group: Low R&D spending, Production efficiency, as an emphasis on low
prices characterizes the business models of companies in this strategic group. They are
pursuing a low risk, low return strategy. It is low risk because they are investing
millions of dollars in R&D. It is low return because they cannot charge high prices.
Strategic Types:
By strategic type, we mean that a strategic orientation which is a combination of
structure, culture and process consistent with that strategy. The different strategic
orientation is the reason behind the varying behaviour of firms facing similar
environment. In order to examine the intensity of competition and to predict the
moves of firms within strategic groups one has to familiarizes with different strategic
types.
COMPETITIVE CHANGES DURING INDUSTRY EVOLUTION
Industries pass through various stages such as growth, maturity and decline. The
competitive forces act upon these stages and give rise to opportunities and threats for
an industry. A strategist should be aware of these developments during strategy
formulation and anticipate them in advance.
Industry Life Cycle and Industry Environment
The industry life cycle model is used for analyzing the effects of industry evolution on
competitive forces. Based on the industry life cycle model, the industry environment
could be identified as follows:
(1) Embryonic industry environment
(2) Growth industry environment
(3) Shakeout environment
(4) Mature industry environment
(5) Declining industry environment
(1) Embryonic Industries: An embryonic industry is one which is just beginning to
develop. Embryonic industry may evolve due to a company’s innovative
efforts. For example, Apple Computer, Xerox.
(2) Growth Industries: From embryonic stage, the industry moves on to growth
stage. New customers enter the market and demand expands rapidly.
(3) Industry Shakeout: Growth stage is not sustained continuously and the
shakeout stage follows necessarily. Here the demand is saturated (price cutting
and price war).
(4) Mature Industries: It enters the mature stage once the shakeout stage comes to
an end. Growth is very little or nothing.
(5) Declining Industries: Industry enter into declining stage after the maturity
stage. Negative growth is registered due to technological substitutions.

Industry and Sector: An important distinction that needs to be made is between an
industry and a sector. A sector is a group of closely related industries.
Industry and Market Segments: Market segments are distinct groups of customers
within a market that can be differentiated from each other on the basis of their distinct
attributes and specific demands.
GLOBALIZATION AND INDUSTRY STRUCTURE
In conventional economic system, national markets are separate entities separated by
trade barriers and barriers of distance, time and culture. With globalization, markets
are moving towards a huge global market place. The tastes and preferences of
customers of different countries are converging common global norm. Products like
Coco Cola, Pepsi, Sony Walkman and McDonald hamburgers are globally accepted.
Individual companies have dispersed parts of their production process to various parts
of the world to take advantage of national advantage with respect to cost and factors
of production such as land, labour, capital and energy. The end result is low cost and
enhanced profits.
General Motors has chosen different locations like South Korea, Germany, Japan,
Singapore and Britain for making its product, Le Mans. General Motor has aimed to
reduce its total cost by dispersing its production activities. The world economy has
undergone a fundamental change. Globalization of production and globalization of
markets are taking place.
The intense rivalry forces all firms to maximize their efficiency, quality, innovative
power and customer satisfaction. With hyper competition, the rate of innovation has
increased significantly. Companies try to outperform their competitors by pioneering
new products, processes and new ways of doing business. Previously protected
national markets face the threat of new entrants and intense rivalry.
Hyper Competition
Hyper competition occurs in any industry due to intense environmental uncertainty,
which makes competitive advantage superficial and temporary. With globalization,
new entrants and foreign players make their way into hitherto protected markets.
Distribution channels also vary from country to country.
After regulation of Indian economy the industrial sector has witness’s enormous
changes. The banking sector reforms also contributed to changes in the economic
conditions of India. Merger, acquisition and joint venture with MNCs take place in
large number. Ultimately intense competition is felt in the industrial scene. A vibrant
stock market has emerged.

NATIONAL CONTEXT AND COMPETITIVE ADVANTAGE
In spite of globalization of markets and production successful companies in certain
industries are found in specific countries:
 Japan has most successful consumer electronics companies in the world
 Germany has many successful chemical and engineering companies in the
world
 United States has many of the world’s successful companies in computer and
biotechnology
 It shows that national context has an important bearing on the competitive
position of the companies in the global market
Economists consider the cost and quality of factors of production as the major reason
for the competitive advantage of some countries with respect to certain industries.
Factors of production include basic factors such as labor, capital, raw material, land
and advanced factor s such as technological know-how, managerial talent and physical
infrastructure. The competitive advantages U.S enjoys in bio-technology due to
technological know-how, low venture capital to fund risky start-ups in industries.
According to Michael porter the nation’s competitive position in an industry depends
on factor conditions, Industry rivalry, demand conditions, and related and supporting
industries.
Strategic Types:
By strategic type, we mean that a strategic orientation which is a combination of
structure, culture and process consistent with that strategy. The different strategic
orientation is the reason behind the varying behaviour of firms facing similar
environment. In order to examine the intensity of competition and to predict the
moves of firms within strategic groups one has to familiarizes with different strategic
types.
Miles and Snow have classified the strategic types into:
a) Defenders
b) Prospectors
c) Analyzers
d) Reactors
a) Defenders: The defender strategic type companies have a limited product line
and they focus on efficiency of existing operations. Their preoccupation with
cost reduction does not encourage them to try innovative ideas in new areas.
b) Prospectors: These firms with broad product items focus on product innovation
and market opportunities. Their too much emphasis on creativity makes them
somewhat inefficient. They are preoccupied with creativity at the expense of
efficiency.

c) Analyzers: Analyzers are firms which operate in both stable and variable
markets. In stable markets the company’s emphasis efficiency and in variable
market they emphasize innovation, creative and differentiation.
d) Reactors: The firms which do not have a consistent strategy to pursue are called
reactors. There is an absence of well-integrated strategy-structure-culture
relationship. Their strategic moves are not integrated but piecemeal approach to
environmental change makes them ineffective.
The Determinants of Competitive Advantage
According to Michael Porter, the nation’s competitive position in any industry
depends on the following:
(1) Factor conditions,
(2) Industry rivalry,
(3) Demand conditions and
(4) Related and supporting industries.
Fig: The Determinants of Competitive Advantage
RESOURCES, CAPABILITIES AND COMPETENCIES
Resources
Resource Based View (RBV) defines capability as the ability of a bundle of resources
to perform an activity. It is a way of combining assets, people and processes to
transform inputs into output. Physical assets, financial resources, human skills are of
no use unless these are put to good use, in order to produce results.
This can be represented mathematically thus:
C= F (TA, IA, S)
Where, C= capability TA = Tangible assets, IA = intangible assets and
S = Skills
Intensity of Rivalry
National Competitive
Advantage
Competitiveness of
related and supporting
Industries
Factor
Conditions
Local Demand
Conditions

Capabilities
Capabilities thus, reflect a firm’s capacity to deploy resources that have been
purposefully integrated to achieve a desired end state. They emerge over time through
a complex process of interactions between tangible and intangible resources. The
whole purpose is to create and exploit external opportunities and develop sustained
advantages over rivals in the field. Through repetition and constant practice
capabilities become stronger and more valuable strategically.
Competency
The term competency refers to the ability of an organization to achieve its purpose. It
is the ability to perform exceptionally well and increase the stock of targeted resources
of an organization. Hamel and Prahalad coined the term core competence to
distinguish those capabilities fundamental to a firm’s performance and strategy.
Competitive advantage of a company becomes depends on three factors:
1. The value customers place on the company s products
2. The price that a company charges for its products
3. The costs of creating those products
The value customers place on a product reflects the utility they get from a product, the
happiness or satisfaction gained from consuming or owning the product utility must be
distinguished from price. Utility is something that customers get from a product. It is a
function of the attributes of the product such as its performance, design, quality, and
point of sale and after-sale service.
CORE COMPETENCIES
Core Competencies are fundamental enduring strength which is a key to competitive
advantage. Core competence may be a competency in technology, process, engineering
capability or expertise which is difficult for competitors to imitate. One core
competence gives rise to several products. Honda s core competence in designing and
manufacturing engines had led to several products and business such as cars,
motorcycles, lawnmowers, generators etc.
o Honda’s core competence in designing and manufacturing engines had led to
several products and business such as cars, motorcycles, lawn mowers,
generators etc.
o 3Ms core competence in substrates and coating adhesives has given rise to
60,000 products which includes magnetic tapes, photographic films, coated
abrasives etc. Sony has a core competence in miniaturization.
o Dupont has a core competence in chemical technology.
o Eureka Forbes which manufactures domestic vacuum cleaner develops core
competency in door-to-door selling.
Building core competence is a long-term process. Firms invest heavily in technology
and R&D in order to build core competence. The business units search for emerging

technologies and gain expertise over the. The firms bring out proprietary products,
which confer on them an advantage over competitors. Developing core competence
involves development and training of technical force suitable to the required level.
Core competence is the firm’s key capabilities and collective learning sill that are
fundamental to its strategy, performance and long term profitability.
Core competencies are the activities that the firm performs especially well compared
to competitors and through which the firm adds value to its goods and services over a
long period of time. Core competencies serve as a source of competitive advantage for
a firm over its rivals. They emerge over time through an organizational process of
accumulating and learning how to deploy organizational resources and capabilities.
When developed, nurtured and applied appropriately throughout a firm, core
competencies serve as the basis for a firm’s competitive advantages, its strategic
competitiveness and its ability to earn above average returns.
LOW COST AND DIFFERENTIATION
A company is said to have attained competitive advantage when the profit rate of a
company is higher than industry average. Return on Sales (ROS) and Return on Assets
(ROA) are ratios calculated to determine profit rate. Gross Profit margin is the basic
deciding factors of a company’s profit rate, which is simply the difference between
total revenue and total cost divided by total cost.
Gross Profit Margin = Total Revenue − Total Cost
Total Costs
= (Unit price × Units sold) – (Unit cost × Units sold)
(Unit cost × Units sold)
If the gross profit margin is to be higher, the following three conditions should be
satisfied.
1) The unit price of the company must be higher than that of other average
companies.
2) The unit cost of the company must be lower than that of other average
companies.
3) The company must have a lower unit cost and a higher unit price.
Companies resort to premium when they charge high unit price than the industry
average. The companies and value to the product form the consumer’s perspective in
order to charge premium price. Besides, they go for differentiated products in terms of
quality, design, after sales service and delivery time.
Low cost and differentiation are classified as generic business level strategies as they
represent the two basic ways of attaining competitive advantage. Companies which go
for low cost strategy, do everything possible to reduce unit costs. Firms which opt for

differentiation strategy, do everything to differentiate product from that of other
players.
Differentiation and Cost Structure
Toyota has differentiated itself from General Motors by its superior quality, which
allows it to charge higher prices, and its superior productivity translates into a lower
cost structure. Thus its competitive advantage over GM is the result of strategies that
have led to distinctive competencies resulting in greater differentiation and a lower cost
structure.
Consider the automobile Industry, In 2003 Toyota made 2402 dollar in profit on ever y
vehicle it manufactured in North America. GM in contrast, made only 178 dollar profit
per vehicle. What accounts for the difference?
First has the best reputation for quality in the industry. The higher quality translates
into a higher utility and allows Toyota to charge 5 to 10 per cent higher prices than
GM. Second Toyota has a lower cost per vehicle than GM in part because of its
superior labor productivity.
GENERIC BUILDING BLOCKS OF COMPETITIVE ADVANTAGE
A company has a competitive advantage over its rivals when its profitability is greater
than the average profitability of all companies in its industry. It has a sustained
competitive advantage when it is able to maintain above average profitability over a
number of years. The following are factors for building competitive advantage:
Fig: Generic Building Blocks of Competitive Advantage
Efficiency: In a business organization, inputs such as land, capital, raw material,
managerial know-how and technological know-how are transformed into outputs such
as products or services. Efficiency is measured as a ratio between the costs of inputs
Superior Quality
Competitive
Advantage
Low Cost
Differentiation
Superior
Efficiency
Superior Customer
Service
Superior Innovation

required to produce a given output. Efficiency of operations enables a company to
lower the cost of inputs to produce given output and to attain competitive advantage.
Employee productivity is measured in terms of output per employee. The Japanese
auto giants have cost based competitive advantage over their near rivals in U.S.
Quality: Quality of goods and services indicates the reliability of doing the job, which
the product is intended for. High quality products create a reputation and brand name
which in turn permits the company to charge higher price for the products. Quality is
also influenced by greater efficiency. Hence efficiency, high product quality and
productivity move in the same direction.
Innovation: Innovation means new ways of doing things. Innovation results in new
knowledge, new product development, new production process, management systems,
organizational structures and strategies in a company. Innovation offers something
unique, which the competitors may not have and allows the company to charge high
price. Photocopiers developed by Xerox and Sony’s Walkman are typical examples of
successful product innovation of pioneering companies.
Customer Responsiveness: Companies are expected to provide customers what they are
exactly in need of by understanding customer needs and desires. Achieving superior
customer responsiveness involves giving customer value of money. Customer
responsiveness is determined by customization of products, quick delivery, quality,
design and prompt after sales service. The popularity of courier service over Indian
Postal Service is due to the quickness of service. Caterpillar attends to customer
complaints within 48 hours anywhere in the globe.
DISTINCTIVE COMPETENCIES
The relationship of a company strategy involves distinctive competencies and
competitive advantage. Distinctive competencies shape the strategies that the company
pursues which lead to competitive advantage and superior profitability. However, it is
also very important to realize that the strategies a company adopts can build new
resources and capabilities or strengthen the existing resources and capabilities thereby
enhancing the distinctive competencies of the enterprise. Thus the relationship between
distinctive competencies and strategies is not a linear one, rather it is a reciprocal one
in which distinctive competencies shape strategies and strategies help to build and
create distinctive competencies.
Distinctive Competencies: Distinctive competencies are firm specific strengths that
allow a company to differentiate its product and achieve substantially lower costs than
its rivals and thus gain a competitive advantage.
Internal Analysis is a three step process:
1) Manager must understand process by which companies create value for
customers and profit for themselves and they need to understand the role of
resources, capabilities and distinctive competencies in this process.

2) They need to understand how important superior efficiency, innovation, quality
and responsiveness to customers are in creating value and generating high
profitability.
3) They must be able to identify how the strengths of the enterprise boost its
profitability and how any weaknesses lead to lower profitability.
RESOURCES AND CAPABILITIES
Resources: Resources are financial, physical, social or human, technological and
organizational factors that allow a company to create value for its customers.
Capabilities: Capabilities refer to a company s skills at co-coordinating its resources
and putting them to productive use.
A critical distinction between Resources and Capabilities:
The distinction between resources and capabilities is critical to understanding what
generates a distinctive competency. A company may have valuable resources, but
unless it has the capability to use those resources effectively, it may not be able to
create a distinctive competency.
For Example: The steel mini-mill operator Nucor is widely acknowledged to be the
most cost efficient steel maker in the United States. Its distinctive competency in low
cost steel making does not come from any firm specific and valuable resources. Nucor
has the same resources as many other mini-mill operators. What distinguishes Nucor is
its unique capability to manage its resources in a highly productive way. Specifically
Nucor s structure, control systems and culture promote efficiency at all levels within
the company.
DURABILITY OF COMPETITIVE ADVANTAGE
Durability of competitive advantage refers to the rate at which the firm’s capabilities
and resource depreciate or become obsolete. Companies try hard to sustain
competitive advantage since every other company tries to develop distinctive
competencies and gain competitive advantage.
Durability depends on three factors:
 Barrier to Imitation
 Capability of Competitors
 Dynamism of Industry
Barriers to Imitation: Barriers to those factors, which make it difficult for a competitor
to copy a company’s distinctive competencies. The longer the period for the
competitor to imitate the distinctive competence, the greater the opportunity that the
company has to build a strong market position and reputation with consumers.

• Imitability refers to the rate at which other duplicate a firm’s underlying
resources and capabilities.
• Tangible resources such as land, building and equipment are visible and
imitable.
• Intangible resources like brand names are difficult to imitate and brand names
represent the company’s reputation.
• Similarly marketing and technological know-how are also intangible resources.
Capabilities are by-products of internal operations and decision-making process of a
company and it is difficult for competitors to comprehend it. If the firm’s core
competence emanates from explicit knowledge i.e. knowledge expresses, articulated
and communicate, it is easily imitated by competitors. When capabilities emanate
from tacit knowledge i.e. knowledge not communicated as it is deep-rooted in
organization’s culture and employees experience, imitation will be tough for
competitors.
Hence a distinctive competence based on unique capabilities is more durable than one
based on resources. Capabilities are invisible to outsiders and it is rather difficult to
imitate.
Capabilities of Competitors: When a firm is committed to a particular course of action
in doing business and develop a specific set of resources and capabilities, such prior
commitments serve as a deterrent to imitate the competitive advantage of successful
firms. U.S. automobile giants (General Motors, Ford, Chrysler) investments in large
sized cars served as a setback in shifting their massive investments for low cost small
sized cards as made by Japanese competitors.
Dynamism of Industry: Dynamic industries are characterized by high rate of
innovation and fast changes. In dynamic industries, product life cycle will be short
and competitive advantage will not last for a long time. It gives rise to hyper
competition. The consumer electronic industry and computer industry are typical
examples of dynamic industries. The turbulence in computer industry environment has
been contributed by continuous innovations of Apple Computers, IBM, Compaq and
Dell.
AVOIDING FAILURES AND SUSTAINING COMPETITIVE ADVANTAGE
Analyzing best industrial practice through benchmark will facilitate organizations to
build distinctive competencies. Bench marking involves identification of best
practices adopted in other countries. It involves measurement of the firms against
products, prices, practices and services of some of the most efficient global
competitors. When Xerox was in trouble 1980s, Xerox applied bench marking for 240
functions against comparable areas in other companies.

The single most significant step in avoiding failure is identification of barriers to
change and overcoming such barriers. This step will point out the need for new
organizational structure and control systems in response to the changed environment.
Appropriate leadership style and prudential use of power will be of help in
maintaining competitive advantage.
Why do Companies Fail?
A failing company is one whose profit rate is substantially lower than average profit
rate of competitors. Declining profit and loss of competitive advantage are some of the
reasons for failure of companies. Studies have pointed out the following reasons for
failure of companies.
 Inertia
 Prior strategic commitments
 Too much inner directedness and specialization
Inertia: In changed market conditions, companies find it difficult to change their
strategies and structure accordingly. The changed competitive conditions put pressure
on the decision makers to introduce suitable changes in developing capabilities.
Prior Strategic Commitments: The commitments which are already made in terms of
huge investments, direction and facilities prove to be a setback and result in
competitive disadvantage. IBM’s massive investments were locked in a shrinking
business.
Too much Inner Directedness: Icarus, a Greek mythical figure, who was held as
prisoner in an island flew so well and went higher and higher up to the sun and met
with his fatal end. Many companies, like Icarus are carried away by initial success and
lose sight of external environment. Procter and Gamble and Chrysler were
overconfident of their selling ability and paid no attention to new product
development and ended up in inferior products.
Avoiding failures and sustaining competitive advantage
When a company loses its competitive advantage, its profitability falls. The company
does not necessarily fail; it may just have average or below average profitability and
can remain in this mode for considerable time although its resource and capital base is
shrinking. A failing company is one whose profitability is new substantially lower than
the average profitability of its competitors, it has lost the ability to attract and generate
resources so that its profit margins and invested capital are shrinking rapidly.
Steps to Avoid failure:
1) Focus on the building blocks of competitive advantage
2) Institute continuous improvement and learning
3) Track Best Industrial Practice and Benchmarking
4) Overcome Inertia

Evaluation of Key Resources (VRIO):
Barney has evolved VRIO framework of analysis to evaluate the firm s key resources.
The following questions are asked to assess the nature of resources.
 Value - Does it provide competitive advantage?
 Rareness - Do other competitors possess it?
 Imitability - Is it costly for others to imitate?
 Organization - Does the firm exploit the resources?
Part ‘A’ Questions
1. Define the concept of environment.
2. Mention the two strategic groups within the industry.
3. Identify the life cycle of industry environment.
4. What are the strategic types of competitive advantage?
5. Define capability.
6. What is competency?
7. What do you understand by core competency?
8. Define distinctive competency.
9. What is meant by resources?
10.What is meant by capabilities?
Part ‘B’ Questions
1. Explain Porter’s five forces model.
2. Enumerate the determinants of competitive advantage.
3. Explain the factors for building competitive advantage.
4. Discuss the factors for durability of competitive advantage.
5. Elucidate the relationship between resources, capabilities and competitive
advantage of a business firm.
************
Text Books and References:
1. Azhar Kazmi, “Strategic Management & Business Policy”, Tata McGraw Hill,
New Delhi, 3rd
Edition, 2008.
2. Dr.M.Jeyarathnam, “Strategic Management”, Himalaya Publishing House, 5th
Edition, 2011.
3. Charles W.L.Hill & Gareth R Jones, “An Integrated Approach to Strategic
Management”, Cengage Learning India Private Ltd., New Delhi, 2008.

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