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

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I.

Explain the relationship between strategic management and competitive

advantages
1. 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.
2. 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

3. 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.
4. 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
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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
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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 do very little media advertising due to the strategic
location which is enough for branding and self-promotion.
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

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 do it,
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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.
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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 3 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 3 years, it will account for 15-20% of the

number of tourists who want to approach and enjoy highland tourism. When people

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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 70-

80% 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 5 of the 7 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
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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.
1.

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 do. 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.
2.

Strategists use benchmarking and consider the 5 forces in considering

differentiation

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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 3 strategies which are
1.

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.
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2. 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.
3. 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.

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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.

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