Topic
The Application of Porter’s View of Strategy and Competitive Advantage in Ningbo Bird Case
Instructions
| This essay is to be based on the application of ideas from the Resource Based View literature to the organization in the case study that will be made available. Q. Drawing on Porter’s Strategy as Choice perspective evaluate whether and how Ningbo Bird’s mobile phone business generates sustainable competitive advantage. You need to draw on ideas from Michael Porter on value proposition, strategic themes, trade off choices and orders of fit, and use appropriate evidence from the case study provided, to evaluate Ningbo Bird’s sustainable competitive advantage. The key to doing well is to demonstrate that you can use these theoretical ideas and apply them as you were doing in the seminars. (NB Porter’s 5-forces framework and earlier generic strategies are NOT required and will not receive marks) Please note that your assignment MUST be written around the evidence in the case study provided. There is no need to do any additional research on Ningbo Bird, and we are not interested in what Ningbo Bird is doing now. All evidence drawn from the case study must be appropriately referenced, as should all of the academic ideas that you draw on. All citations (in text references) of the case study must include the page number from the case that you are referring to. Assignment Learning Objective: To demonstrate your understanding and ability to apply concepts from the module to an organization or firm, to undertake a theoretically informed analysis and to draw conclusions that link the topic of study to the objective of sustaining competitive advantage. For this essay you will be required to independently investigate the academic literature on the topic and apply your knowledge of this literature to the organization. |
Answer Preview
Unique value proposition
The most basic retirement for a competitive strategy is developing a unique value proposition. A firm needs to choose the kind of specific value provided to customers and to deliver uniqueness compared to competitors (Tovstiga, 2013). Bird resonated with the need for a tailored value chain by focusing on untapped aspects of the pager and mobile markets. The first unique value proposition was delivered when Bird developed a pager with different features from most pagers manufactured by dominant players such as Motorola. Because most pagers could not display caller’s telephone numbers, Bird manufactured pagers that could display the numbers and simple characters in the Chinese language (CEIBS, 2004, p. 4). There was no immediate imitation by other firms because they did not consider the non-English version as a viable business opportunity. Indeed, Bird conformed to Porter’s idea that a firm has to understand the specific needs to meet for particular customers, and develop product offers with the relevant features (Ferdinand, 2013). Therefore, Bird’s competitive strategy revolved around its ability to meet local communication needs chosen as part of its value proposition structure.
Another area of sustainable competitive advantage is the ability to provide relative prices with acceptable and unique value with satisfactory profitability (Rezaee, 2016). Bird utilised the value of price by pursuing a low-cost strategy and a speedy expansion to reach more lower-end consumers (CEISB, 2004, p. 10). When the company started manufacturing mobile phones, the market was under high-speed growth, a situation that made it hard for Bird to compete in terms of technology, financing and brand recognition. To overcome this restriction, Bird focused on low cost as an advantage over competitors. While price reduction had become a frequent strategy in the early 2000s, Bird capitalised on the low cost of labour and supplies from China to drive the prices further down. Some of the enablers for low costs according to the Choosing strategy are economies of scale, input costs, organisational efficiency, and production techniques (Magretta, 2012). Bird enabled low costs by investing in mass production to not only meet the mass consumption growth, but also spend less money per unit output. It further invested in technology to control quality and minimise defects that had kept product turnover low. Therefore, by focusing on low priced products and extending the coverage nationally, Bird became an affordable and reliable brand with a distinctive value compared to rivals.
Word Count: 1600