MANDALAY REGIONAL DEVELOPMENT:COMPETITIVE ADVANTAGE

PROF.DR.AUNG TUN THET

PROFILE OF MANDALAY

MANDALAY

Center of Myanmar’s Culture – magnet for tourists Second largest city Strategic location in Central Myanmar Important hub for transport of people and goods Connectivity: Other parts of country China and India Multiple modes of transportation

MANDALAY

City population of 1,225,553 (2014 census)Economic hub of Upper Burma Increased commerce with ChinaUpper Myanmar’s main commercial, educational and

health center

MANDALAY

Major trading and communications center for northern and central Myanmar

External trade to China and India

MANDALAY

Leading traditional industries: Silk weaving Tapestry Jade cutting and polishing Stone and wood carving Marble and bronze Buddha images Temple ornaments and paraphernalia Gold leaves and of silver Manufacture of matches, brewing and distilling

COMPETITIVE ADVANTAGE

PROSPERITY

CreatedNot inheritedDo not grow out of natural endowments, labour pool, etc.

COMPETITIVENESS

Capacity to innovate and upgradeGain advantage because of pressures and challenges

COMPETITIVENESS

Benefit from :Strong domestic rivalsAggressive home-based suppliersDemanding local customers

COMPETITION

GrowingCreation and assimilation of knowledge

COMPETITIVE ADVANTAGE

Created and sustained through localized processesDifferences in values, culture, economic structures,

institutions, historiesEnvironment – forward looking, dynamic, challenging

COMPETITIVE ADVANTAGE

Traditional thinking flawedNew perspectivesWhat works? Why?Apply

COMPETITIVE ADVANTAGE

Acts of innovationNew technologiesNew ways of doing thingsNew basis for competitionBetter means for competing in new ways

INNOVATION

New product designNew production processNew marketing approachNew way of training

INNOVATION

IncrementalCulmination of small insights and advances Ideas “not new” Investments in skills and knowledge, physical assets,

brand reputation

INNOVATION

New market opportunityServing market segments others ignored

INFORMATION

Important role in innovation and improvementResearch & DevelopmentMarket Research

DIAMOND OF COMPETITIVE ADVANTAGE

DIAMOND OF COMPETITIVE ADVANTAGE

Four Attributes

1. Factor Conditions

2. Demand Conditions

3. Related and Supporting Industries

4. Form’s strategy, structure and rivalry

DETERMINANTS OF COMPETITIVE ADVANTAGE

Firm’s Strategy, Structure,

Rivalry

Related & Supporting Industries

Demand Conditions

Factor Conditions

FACTOR CONDITIONS

Factors of productionSkilled labour InfrastructureCapital

DEMAND CONDITIONS

Home market demand for goods and services

RELATED AND SUPPORTED INDUSTRIES

Presence or absence of supported industries and related industries

FIRM’S STRATEGY, STRUCTURE AND RIVALRY

How companies created, organized and managedNature of domestic rivalry

DIAMOND

Business environmentCompanies bornLearn to competeSystemEssential ingredients for competitive success

ROLE OF GOVERNMENT

CONTRADICTORY VIEWS

“Interventionist” – Helper or Supporter“Free Market” ViewBoth incorrect

GOVERNMENT

CatalystChallengerEncourage companies raise aspirationsTransmitting and amplifying diamond

BASIC PRINCIPLES

Focus on specialized factor creationSpecialized apprenticeship programResearch efforts – UICPrivate investments

BASIC PRINCIPLES

Avoid intervening in factor and currency marketsEnforce strict product, safety and environmental

standardsLimit direct cooperation among industry rivalsPromote goals that lead to sustained investmentDe-regulate competition

COMPANY’S AGENDA

COMPANIES

Achieve and sustain Competitive AdvantageRecognize central role of innovation Innovation grows out of pressures and challengesLeadership

POLICIES

Create pressures for innovationSeek out most capable competitors as motivatorsEstablish early warning systems Improve national diamond

POLICIES

Welcome domestic rivalryRegionalize/GlobalizeUse alliances selectivelyLocate home base to support competitive advantage

ROLE OF LEADERSHIP

MANAGERS

Focus on improving financial performanceSolicit government assistanceSeek stabilityReduce risk through alliances and mergers

LEADERS

Believe in change Innovate continuouslyRecognize need for pressures and challengesEncourage appropriate-painful Government

policies/regulationsSacrifice for sustain Competitive Advantage

STRATEGIES FOR COMPETITIVE ADVANTAGE

10 REASONS BUSINESS SUCCEED

1.Experience and skills of top managers

2.Energy, persistence and resourcefulness (will to make business succeed of top managers)

3.Product cut above competition and service that doesn’t get in way of people buying

4.Create “buzz” around product with aggressive and strategic marketing

5.Deal-making skills to sell product at highest possible price

10 REASONS BUSINESS SUCCEED

6.Developing new products to retain and build customer base

7.Deal-making skills to work with resource suppliers to keep costs low

8.Treat employees, suppliers and partners fairly and respectfully

9.Superior location and/or promotion creating connection between product and where obtained

10.Steady source of business during both good economic times and downturns

ESSENCE OF COMPETITIVE ADVANTAGE

“Why should the customer purchase from this operation rather than competition?”

Builds core of loyal customersNiche marketsEdge beyond what competition has or does

POTENTIAL STRATEGIES FOR DIFFERENTIATION

Differentiating product or service from those of competition

One or two strategies

PRODUCT FEATURES AND BENEFITS

What makes the product unique and desired? Consider product characteristics - style, handling, taste,

quality ingredients, comfort, production methods (natural or organic), certification, etc.

Are product characteristics significantly different from those of currently available products?

Can venture provide these features or benefits effectively?

LOCATION(S)

Chosen with careDirectly influence other decisions - marketing, product

distribution, product selection

STAFF

Ensure front and management:Produce good products Provide positive customer experienceProfessionalExpertise

OPERATING PROCEDURES

Policies, processes, and standardsSmooth operationsCreate valueOffer positive customer experience

PRICE

Fundamental cost advantage Lower overhead or shipping costs Cheaper labor, and/or low-priced raw materials

CUSTOMER INCENTIVE PROGRAMS

Attract new and repeat customers Giveaways, coupons, sales, promotions, and/or volume

discounts

GUARANTEES AND WARRANTIES

Perception of quality product reinforced

BRAND NAME RECOGNITION

Carefully conceived and executed marketing plan and strategy

Focus on customer major contribution to business success

QUALITY

Underlying factorValue-added strategies - third party certification

COMPETITIVE ADVANTAGE EVALUATION PROCESS

EVALUATE RESOURCES

Basis for competitive advantage Critical look at existing resources and product/service

offerings

CLARIFY GOALS

Clear idea specific and achievable goalsWhat business will do for itself and customers in futureBenchmarks for success Maintain focus

DEFINE CUSTOMERS

Needs and wants of potential customers establishedCharacteristics of customers examined to identify

commonalities

EXAMINE COMPETITORS

Direct competition Indirect competitor Compare strengths and weaknesses of competition

MAKE SENSE OF IT ALL

Understanding needs of market (customers)Devising strategy Target marketBusiness’ strengths and weaknessesBusiness’ goalsProduct/service developedStrategies of competition

KEY QUESTIONS

Business and target market clearly defined? Competitors? Specific strategy for success? Competition’s moves tracked regularly? Business taking advantage of competition’s weaknesses

and/or any competitive opportunities?

KEY QUESTIONSWhat has been learned from competition’s

mistakes/strengths? How do business’ prices and products compare with rest

of industry?Who are customers? Does business have (or build) loyal base? Are employees trained in customer service? What trends ahead, and can business take advantage of

them?

KEY QUESTIONS

“Building sustainable competitive advantages, revolves around differentiating a product from the

competition,along attributes that are important and relevant to

customers.”

KEEPING THE EDGE SHARP

Competitive advantages stay competitive advantages without significant effort

Over time edge erode Establishing competitive edgeMaintaining it