Comparison of Online and Offline Retail Environment of Car Industry

A firm has a sustainable competitive advantage when it implements a value creating strategy that is not being implemented by another competitor and cannot be copied by another firm. As all resources are not of equal importance or possess the potential to be a source of sustainable competitive advantage, it is important to be able to characterize the relevant resources. Barney (1991) suggests that these resources must meet four conditions; value, rareness, inimitability, and non- substitutability. Collis and Montgomery (1995) proposes that these advantage-creating resources meet five tests; inimitability, durability, appropriability, substitutability and competitive superiority.

Value creation means increase the value of products, service and even business to meet the customers’ needs and requirements so that they can get competitive advantages. (Business Fundas, 2012) As we analyzed, fast food industry’s threat of new entrants is low and the availability of substitutes is high. It’s a fare market which the buyers have strong powers.

For a business to be successful and have a competitive advantage, it is important to evaluate the company’s resources and capabilities (Pitt & Koufopoulos, 2012). Resources in a company are the productive assets owned (tangible or intangible) whereas capabilities are what the company can do with this (Grant, 2010). “Establishing competitive

Increase customers’ value by adding value to features of the products, improve customer service by being more responsive, increase the range of complementary products and modify as per orders. Differentiation should promote long-term profit and growth. Moreover to benefit from cost advantage, identify both primary and support activities are clearly identify, required a strong know1egde of organization value if value chain will disrupt. Analyse how to create customer value, recognize cost drivers from each activity and identify between link activities by reducing cost from one to

A value proposition is composed of a two-sided equation of value, a differentiated customer value and an incremental shareholder value.

This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA,

The resource-based view(RBV), based on the internal environment of a company, explains the performance differences among firms in an assumption of that having a high performance (Wernerfelt,1984) are made up of bundles of resources that give them advantages in the maketing(Barney and Arikan, 2001). It figures out the resources are valuable, rare, costly-imitated and have an organizational orientation, also known as VRIO framework(Barney, 2002). The resources, refer to the

In 2003 when Nicholas Carr wrote the article “IT Doesn’t Matter” companies were just beginning to utilize information technology as a competitive advantage. Mr. Carr contends that technology is not a permanent advantage because in time the competition will acquire the same resources and Information Technology (IT) just becomes another commodity. For the majority of companies throughout the world IT resources have become easily accessible and affordable. If Mr. Carr’s opinion is correct then the equality of IT access has just become a cost of doing

To begin with, heterogeneity of capabilities and resources of firms, which is explained as “enduring and systematic performance differences among relatively close rivals”, provides a foundation of the resource-based view (Song, et al.,2006). The implication of this assumption is that core competence conveys the valuable and unique feature of products to customers. The RBV disagrees with the opinion that the resources are homogeneous; if homogeneity is assumed to be essential to develop a proper strategy, the strategy can be easily copied by competitors, which will ultimately result in the dissipation of above-normal rents. Conversely, the unique and fixed resources on hand will lead to outstanding performance and ultimately turn to be a competitive advantage, under the circumstances that sustainable competitive advantage is achieved in an environment where competition does not exist.

The textbook describes a value benefit as a characteristic related to the nature of the product or service itself. Things like quality, fashion, and reputation are elements that give a product or service value in the eyes of the customer and a cost benefit refers to the ways by which a firm can keep costs low for the customer (Katz, J., & Green, R. 2014 pg.195).

Value chain is an approach to know how an item or activities create value for consumers. The most of value provides to consumers, the most of competitive advantage an organization build. In this analysis, value chain model has separated into primary and support activities. Primary activities are included in the physical creation of the item and service. On the other hand, support activities give the inputs and infrastructure that enable the primary activities to happen. This value chain model can be refer to below figure 5.

Resources are the source of the firm’s capabilities. Resources are bundled to create organisational capabilities. Some of a firm’s resources are tangible and intangible. Tangible resources are assets that can be seen and quantified. Intangible resources include assets that typically are rooted deeply in the firm’s history and have accumulated over time. Intangible resources are relatively difficult for competitors to analyse and imitate. The four types of tangible resources are financial, organisational, physical and technological. And the three types of intangible resources are human, innovation and reputational (Hanson, D., Hitt, M., Ireland, R. D., & Hoskisson, R. E., 2011, pp. 75-78).

Consumers will only purchase goods or services from a particular firm only if it offers certain value that the competitors cannot offer. Thus create and capture this consumer value is a vital business activity.

On the value proposition, the model creates the platform for customers and vendors to meet. Consumers are able to negotiate or bid for low prices which give them the opportunity to have quality products at lower cost and which results in savings for the customer. On the other hand, the model create a new channel for the vendor to sell off it excess products at a good price directly to the consumer thus increasing their revenues.

For transforming a short-run competitive advantage into a sustained competitive advantage we require resources that are heterogeneous in nature and not perfectly mobile. This translates into valuable resources that are neither perfectly imitable nor substitutable without great effort. If these conditions are fulfilled then the bundle of resources can sustain the firm's above average returns.