Chapter 4 MGT Exam -273

Internal Analysis: Resources, Capabilities, and Core Competencies

Five Guys Example

Core Competency- “Make the best burger, don’t worry about cost”

• Focus = quality over cost, fresh ingredients and attention to detail

Differentiation Strategy

Strategy- Differentiation strategy —> compete on quality, not price

• limited menu —> burgers + fries

• no advertising, word of mouth

Cost Structure-

• higher costs than competitors

• prices based on ingredient cost + margin

• will not lower quality to reduce cost

Growth Strategy

• Slow growth at first (perfect product first)

• Then franchising → rapid expansion

• Expanded globally after success

Inside the Firm: Competitive Advantage based on Core Competencies, Resources, and Capabilities

core competencies

Unique strengths, embedded deep within a firm, that are critical to gaining and sustaining competitive advantage.

• differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost

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