In the earlier blog we mentioned about "competitive advantage"; today we discuss about another term called " competitive parity".
A company's strategic theory is said to have created for it competitive parity when it's actions in line with the theory have created economic value, but there are several others who also engage in similar actions. A firm gains competitive parity when its theory of how to compete successfully is in line with the underlying economic process of the industry or the market, but there are several other firms too which understand this and are implement the same theory.
We could refer here to our small caselet on Honda here to get the concept clear - even if Honda's initial theory of how to compete was correct (which wasn't the case) it would at best have gained competitive parity, and might not have been as successful as it is today.
Read in Kannada:
http://somanagement.blogspot.com/2011/06/blog-post_3419.html
A company's strategic theory is said to have created for it competitive parity when it's actions in line with the theory have created economic value, but there are several others who also engage in similar actions. A firm gains competitive parity when its theory of how to compete successfully is in line with the underlying economic process of the industry or the market, but there are several other firms too which understand this and are implement the same theory.
We could refer here to our small caselet on Honda here to get the concept clear - even if Honda's initial theory of how to compete was correct (which wasn't the case) it would at best have gained competitive parity, and might not have been as successful as it is today.
Read in Kannada:
http://somanagement.blogspot.com/2011/06/blog-post_3419.html
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