Module 3 Journal
Activity 3.1 How Amazon Exploited Functional Mechanisms
Amazon’s growth can be understood by looking at how it exploited the four
functional building blocks of competitive advantage: efficiency, quality, innovation,
and customer responsiveness.
Efficiency:
Amazon took advantage of efficiency by building one of the largest and most
advanced supply chain systems in the world. Its fulfillment centers rely heavily on
robotics and data-driven logistics to cut costs and speed up deliveries. This matches
what Barney and Mackey (2018) describe about efficiency profits, where firms that
organize resources better than competitors can earn above-average returns.
Quality:
Amazon has also leaned on quality to build trust. It enforces strict standards for
sellers, maintains strong delivery reliability, and allows customers to rate products.
This creates a feedback loop where customers can judge quality for themselves.
Knott (2015) highlights how managers evaluate resources and capabilities to
maintain long-term advantage, which is exactly how Amazon treats quality as a
resource that keeps customers coming back.
Innovation:
The company has repeatedly exploited innovation to expand its reach. The launch
of Prime, one-click ordering, and Alexa shopping redefined customer expectations.
Beyond retail, Amazon created Amazon Web Services (AWS), which turned into one
of the most profitable parts of its business. Innovation here is not just about
products, but about new business models that competitors struggle to copy.
Customer Responsiveness:
Finally, Amazon is highly responsive to customer needs. Its same-day and next-day
shipping, personalized recommendations, and no-hassle return policies are all
examples of shaping services around what customers value most. The Deloitte and
MAPI (2019) study on smart factories also shows how companies can integrate
technology to become more responsive, which Amazon has done successfully in
logistics and customer service.
Reflection:
Overall, Amazon has not just used these mechanisms but exploited them by scaling
them aggressively. It built efficiency into a global system, turned quality into a trust
mechanism, innovated in both retail and technology, and constantly adapted to
what customers wanted. These choices have made Amazon one of the most
dominant firms in the world.
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Sources:
● Barney, J. B., & Mackey, A. (2018). Monopoly profits, efficiency profits, and
teaching strategic management. Academy of Management Learning &
Education, 17(3), 359–373. [Link]
● Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?
Management Decision, 53(8). [Link]
● Deloitte & MAPI. (2019). 2019: Deloitte and MAPI smart factory study.
Deloitte.
Activity 3.2: Strategic Objective Choices and Decisions
In this activity, I had to think about how firms make decisions when choosing their
strategic objectives. Every company wants to gain a competitive advantage, but the
way they decide on objectives often depends on how they balance costs, resources,
and future risks.
One way to look at it is through efficiency versus monopoly profits. Barney and
Mackey (2018) explain that efficiency profits come from organizing resources better
than competitors, while monopoly profits often come from controlling markets.
Companies like Walmart or Costco often choose strategies that focus on efficiency,
lowering costs, and expanding through scale. On the other hand, firms in industries
with fewer competitors may rely on monopoly-like advantages, such as patents or
unique technologies.
Another big factor is how managers evaluate resources. Knott (2015) discusses the
VRIO framework, which helps leaders decide if their resources are valuable, rare,
difficult to imitate, and supported by the organization. This framework often guides
strategic objectives because managers need to ensure that their chosen goals
actually build on the strengths of the company. For example, a tech company might
decide its objective is to become the market leader in artificial intelligence because
it has strong R&D capabilities that meet the VRIO criteria.
Finally, firms also have to account for outside risks when deciding their objectives.
The Deloitte and MAPI (2019) report on smart factories shows how many
manufacturers are setting objectives that respond to automation and technology
integration. These choices are shaped by the risk of being left behind if they don’t
adapt.
Reflection:
I think the main takeaway is that companies cannot just set objectives at random.
Their decisions are always tied to how they can exploit resources, minimize risks,
and anticipate future challenges. A good strategic objective matches what the
company already does well, while also preparing it for change.
Sources:
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● Barney, J. B., & Mackey, A. (2018). Monopoly profits, efficiency profits, and
teaching strategic management. Academy of Management Learning &
Education, 17(3), 359–373. [Link]
● Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?
Management Decision, 53(8). [Link]
● Deloitte & MAPI. (2019). 2019: Deloitte and MAPI smart factory study.
Deloitte.
Activity 3.3: Value Chain Table for TRU
Primary Examples at TRU
Activities
Inbound Admissions processing, handling applications, preparing course
Logistics outlines and learning materials
Operations Teaching (lectures, labs, online classes), grading, student-faculty
interaction
Outbound Issuing transcripts and degrees, graduation ceremonies, alumni
Logistics relations
Marketing & Recruitment events, partnerships with schools, digital marketing
Sales for domestic and international students
Service Student advising, career services, counseling, extracurricular
programs, student life support
Support Activities Examples at TRU
Procurement Acquiring classroom technology, books, lab equipment,
facilities maintenance contracts
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Human Resources Hiring professors, training staff, faculty development
programs
Technology Student portals, online learning platforms, research support
Development tools
Infrastructure Campus facilities, libraries, labs, administrative offices,
governance structure
Reflection:
This table shows how TRU adds value at every step of the student journey.
Admissions and marketing attract students, operations deliver education, and
services support their overall experience. The support activities make these
processes possible by ensuring technology, people, and infrastructure are in place.
Source:
Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior
Performance. Free Press.
Activity 3.4: Impact of COVID-19 on Strategies
The COVID-19 pandemic forced almost every organization to rethink its strategies.
Some of the biggest impacts were on supply chains, digital transformation, and
customer engagement.
Supply Chains:
Many companies had to adapt quickly to shortages and disruptions. For example,
manufacturers shifted from global sourcing to finding local suppliers. This change
reflects what Barney and Mackey (2018) describe about efficiency, where firms
must reorganize resources when conditions change.
Digital Transformation:
COVID-19 accelerated the move toward digital operations. Retailers that already
had strong e-commerce platforms, like Amazon and Walmart, thrived because they
could respond faster. In contrast, traditional stores without digital systems had to
scramble to build online services. Deloitte and MAPI (2019) also highlight how
technology integration improves responsiveness, which became crucial during the
pandemic.
Customer Engagement:
Businesses had to rethink how they connected with customers. Restaurants, for
instance, invested in mobile apps and delivery services. Schools and universities,
including TRU, shifted to online learning platforms almost overnight. These changes
show how innovation and responsiveness became survival strategies during the
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crisis.
Reflection:
Overall, COVID-19 showed that strategies cannot be static. Companies that were
flexible and could exploit innovation and digital tools managed to adapt, while those
that relied too heavily on traditional models struggled. It proved that dynamic
capabilities are essential in uncertain environments.
Sources:
● Barney, J. B., & Mackey, A. (2018). Monopoly profits, efficiency profits, and
teaching strategic management. Academy of Management Learning &
Education, 17(3), 359–373. [Link]
● Deloitte & MAPI. (2019). 2019: Deloitte and MAPI smart factory study.
Deloitte.
● Biondi, A. (2020, March 17). Covid-19’s long wave hits Italian luxury
manufacturing. Vogue Business.
Activity 3.5: Strategic Approach of Visa (10-K Analysis)
Visa’s 10-K report shows that its strategy is centered on being more than just a
credit card company. It positions itself as a global payments network that connects
banks, businesses, and consumers.
Core Strategy:
Visa focuses on scale and reliability. Its main advantage is its enormous network of
merchants and financial institutions. By maintaining efficiency and security in
transactions, Visa ensures that competitors find it difficult to match its reach. This
aligns with Barney and Mackey’s (2018) idea of efficiency profits, since Visa earns
by managing resources and processes more effectively than others.
Innovation:
The company invests heavily in new technologies such as contactless payments,
digital wallets, and fraud detection systems powered by artificial intelligence. These
moves keep Visa competitive in an industry where customer expectations and risks
are always changing. Knott (2015) explains that companies must focus on resources
that are valuable and hard to imitate, and Visa’s technology investments fit that
model.
Partnerships and Expansion:
Visa also builds strategic partnerships with fintech companies and expands into
emerging markets. These partnerships help it reach new customers and adapt to
the trend of mobile-first banking. The Deloitte and MAPI (2019) findings on digital
responsiveness in manufacturing also apply here, since Visa’s ability to integrate
new technologies quickly gives it an edge.
Risks:
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The 10-K report highlights risks such as regulatory pressure, cybersecurity threats,
and competition from new fintech disruptors like PayPal and Square. These risks
could limit Visa’s ability to maintain its dominant position.
Reflection:
Visa’s strategy is about defending its core network while continuously innovating to
stay ahead of new competitors. The balance between security, global partnerships,
and technology adoption has allowed Visa to remain one of the strongest players in
the payments industry.
Sources:
● Visa Inc. (2022). Annual Report (Form 10-K). U.S. Securities and Exchange
Commission.
● Barney, J. B., & Mackey, A. (2018). Monopoly profits, efficiency profits, and
teaching strategic management. Academy of Management Learning &
Education, 17(3), 359–373. [Link]
● Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?
Management Decision, 53(8). [Link]
● Deloitte & MAPI. (2019). 2019: Deloitte and MAPI smart factory study.
Deloitte.
Activity 3.5: Strategic Approach of Visa (10-K Analysis)
Visa’s 10-K report shows that its strategy is centered on being more than just a
credit card company. It positions itself as a global payments network that connects
banks, businesses, and consumers.
Core Strategy:
Visa focuses on scale and reliability. Its main advantage is its enormous network of
merchants and financial institutions. By maintaining efficiency and security in
transactions, Visa ensures that competitors find it difficult to match its reach. This
aligns with Barney and Mackey’s (2018) idea of efficiency profits, since Visa earns
by managing resources and processes more effectively than others.
Innovation:
The company invests heavily in new technologies such as contactless payments,
digital wallets, and fraud detection systems powered by artificial intelligence. These
moves keep Visa competitive in an industry where customer expectations and risks
are always changing. Knott (2015) explains that companies must focus on resources
that are valuable and hard to imitate, and Visa’s technology investments fit that
model.
Partnerships and Expansion:
Visa also builds strategic partnerships with fintech companies and expands into
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emerging markets. These partnerships help it reach new customers and adapt to
the trend of mobile-first banking. The Deloitte and MAPI (2019) findings on digital
responsiveness in manufacturing also apply here, since Visa’s ability to integrate
new technologies quickly gives it an edge.
Risks:
The 10-K report highlights risks such as regulatory pressure, cybersecurity threats,
and competition from new fintech disruptors like PayPal and Square. These risks
could limit Visa’s ability to maintain its dominant position.
Reflection:
Visa’s strategy is about defending its core network while continuously innovating to
stay ahead of new competitors. The balance between security, global partnerships,
and technology adoption has allowed Visa to remain one of the strongest players in
the payments industry.
Sources:
● Visa Inc. (2022). Annual Report (Form 10-K). U.S. Securities and Exchange
Commission.
● Barney, J. B., & Mackey, A. (2018). Monopoly profits, efficiency profits, and
teaching strategic management. Academy of Management Learning &
Education, 17(3), 359–373. [Link]
● Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?
Management Decision, 53(8). [Link]
● Deloitte & MAPI. (2019). 2019: Deloitte and MAPI smart factory study.
Deloitte.
Activity 3.7: Strengths and Weaknesses of Business Approaches
Different strategic approaches offer unique advantages but also come with
limitations. Here’s a breakdown of the main ones:
1. Cost Leadership (Example: Walmart)
● Strengths: Attracts price-sensitive customers, achieves economies of scale,
creates barriers for smaller competitors.
● Weaknesses: Thin profit margins, constant pressure to cut costs, and
difficulty differentiating from rivals. Over time, customers may associate the
brand only with low prices, not quality.
2. Differentiation (Example: Apple)
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● Strengths: Builds strong customer loyalty, allows higher pricing, and creates
a unique market position.
● Weaknesses: Requires continuous innovation, higher R&D and marketing
costs, and risks of imitation by competitors. If innovation slows, the
advantage can disappear.
3. Focus Strategy (Example: Tesla’s early market)
● Strengths: Deep understanding of a niche market, strong customer loyalty in
that segment, and protection from larger competitors initially.
● Weaknesses: Limited market size, reliance on a small customer base, and
vulnerability if the niche shrinks or competitors enter.
4. Hybrid (Efficiency + Responsiveness, Example: McDonald’s)
● Strengths: Balances cost savings with customer needs, adaptable across
global markets, and sustains long-term competitiveness.
● Weaknesses: Risk of being “stuck in the middle” if neither efficiency nor
responsiveness is fully achieved. Execution is complex and requires strong
coordination across operations.
Reflection:
No single approach is perfect. The best strategy depends on the company’s
resources and market environment. The most successful firms are those that
understand their trade-offs and adapt when conditions change.
Sources:
● Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining
Superior Performance. Free Press.
● Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?
Management Decision, 53(8). [Link]
Activity 3.8: Strengths and Weaknesses of VISA’s Approach
Strengths:
VISA’s biggest strength is its global network. It processes billions of transactions
daily across more than 200 countries, giving it unmatched scale and reach. This
creates a strong competitive advantage because it’s difficult for new entrants to
build a network of the same size. Another strength is brand trust. Customers and
businesses see VISA as secure, reliable, and convenient, which keeps them loyal.
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On top of this, VISA invests heavily in digital payment technologies and
cybersecurity, allowing it to stay ahead as the world moves toward cashless
transactions.
Weaknesses:
At the same time, VISA’s business model has weaknesses. It depends heavily on
transaction fees, so any disruption in global spending directly affects revenue. VISA
also faces regulatory challenges, as governments in different countries sometimes
push for lower fees or more competition. In addition, financial technology (fintech)
companies like PayPal and newer digital wallets such as Apple Pay and Google Pay
are growing quickly, which could reduce VISA’s dominance over time. Finally,
because VISA relies on partnerships with banks and merchants, it does not directly
control the customer relationship the way fintech companies do.
Reflection:
Overall, VISA’s strengths clearly outweigh its weaknesses right now, but the
company cannot be complacent. To maintain its advantage, it will need to keep
investing in innovation and adapt to regulatory and competitive pressures.
Sources:
● Visa Inc. (2020). Form 10-K Annual Report. U.S. Securities and Exchange
Commission.
● Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining
Superior Performance. Free Press.
Activity 3.9: Case Study Questions on Toyota
1. How has Toyota developed a competitive advantage?
Toyota’s main competitive advantage comes from its lean manufacturing system,
often called the Toyota Production System (TPS). This system focuses on eliminating
waste, improving efficiency, and ensuring quality at every step. Over time, Toyota
has also built a reputation for reliable, affordable, and fuel-efficient cars, which
strengthens customer loyalty worldwide.
2. What role does innovation play in Toyota’s strategy?
Innovation is central to Toyota’s long-term strategy. It was one of the first major
automakers to invest heavily in hybrid technology, leading with the Prius. Today,
Toyota is also putting resources into hydrogen fuel cells and electric vehicles. By
constantly pushing forward with innovation, Toyota stays competitive in an industry
facing strict environmental regulations and changing consumer expectations.
3. What weaknesses has Toyota faced?
Toyota has sometimes struggled with large recalls, especially during the early
2010s, which damaged its reputation for quality. Another weakness is that Toyota
has been slower than some competitors, like Tesla, in adopting fully electric
vehicles. Finally, as a global company, Toyota faces risks from supply chain
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disruptions, currency fluctuations, and geopolitical changes.
4. What lessons can be learned from Toyota’s approach?
The biggest lesson from Toyota is the importance of long-term thinking. By
investing in lean production and innovation, Toyota has created lasting competitive
advantages. It shows that companies should not only chase short-term profits but
also build systems and cultures that create value over decades.
Sources:
● Ohno, T. (1988). Toyota Production System: Beyond Large-Scale Production.
Productivity Press.
● Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the
World’s Greatest Manufacturer. McGraw-Hill.
Activity 3.10: Discussion Questions on Walmart
1. How has Walmart achieved competitive advantage?
Walmart’s main strength is its ability to offer “everyday low prices.” It has achieved
this by developing an extremely efficient supply chain, using advanced logistics,
and leveraging economies of scale. Walmart’s bargaining power with suppliers also
helps keep costs low, which it passes on to customers.
2. What challenges does Walmart face in maintaining this advantage?
Walmart faces tough competition from online retailers like Amazon, who have
transformed shopping habits by focusing on speed and convenience. Walmart also
faces pressure to improve worker wages and working conditions, which can
increase operating costs. In addition, changing consumer preferences toward more
sustainable and local products may not always align with Walmart’s low-cost, mass-
market model.
3. How has Walmart responded to changes in the retail industry?
Walmart has made significant investments in e-commerce, expanding its online
store and offering services like curbside pickup and home delivery. It has also
improved its technology by using data analytics to track customer behavior and
manage inventory more effectively. At the same time, Walmart is working to
become more sustainable by reducing waste and investing in renewable energy.
4. What lessons can be drawn from Walmart’s strategy?
The main lesson from Walmart is that operational efficiency and scale can create
powerful competitive advantages. However, companies must adapt quickly to new
industry trends, such as e-commerce and sustainability. A business that rests too
much on past success risks being overtaken by more innovative rivals.
Sources:
● Fishman, C. (2006). The Wal-Mart Effect: How the World’s Most Powerful
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Company Really Works – and How It’s Transforming the American Economy.
Penguin.
● Lichtenstein, N. (2011). The Retail Revolution: How Wal-Mart Created a Brave
New World of Business. Picador.
Activity 3.11: Discussion Questions on Apple
1. How has Apple developed its competitive advantage?
Apple’s competitive advantage comes from its strong brand identity, sleek product
design, and ability to create an ecosystem of products that work seamlessly
together. By focusing on user experience, Apple has built a loyal customer base that
is willing to pay premium prices. Its innovation in both hardware and software
integration sets it apart from competitors.
2. What role does innovation play in Apple’s strategy?
Innovation is at the core of Apple’s business. From the iPod to the iPhone and now
services like Apple Pay and iCloud, Apple continuously pushes out new products and
features that reshape industries. Its research and development, combined with
careful attention to design, keeps it ahead in consumer electronics.
3. What weaknesses does Apple face?
Apple’s reliance on premium pricing limits its reach to price-sensitive customers. It
also faces heavy competition from cheaper alternatives, especially in emerging
markets. In addition, Apple depends on global supply chains, making it vulnerable to
disruptions like the COVID-19 pandemic and geopolitical tensions.
4. What lessons can be learned from Apple’s approach?
Apple shows how brand loyalty and differentiation through innovation can create
lasting competitive advantage. It teaches companies that customers will often pay
more for quality, design, and a sense of belonging to a lifestyle brand. The lesson is
to build not only products but also experiences that connect with people
emotionally.
Sources:
● Isaacson, W. (2011). Steve Jobs. Simon & Schuster.
● Lashinsky, A. (2012). Inside Apple: How America’s Most Admired – and
Secretive – Company Really Works. Hachette.
Activity 3.12: Discussion Questions on Amazon
1. How has Amazon developed its competitive advantage?
Amazon’s advantage comes from being customer-obsessed. It offers low prices, fast
delivery, and a massive product range. Its supply chain and logistics are
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unmatched, and services like Amazon Prime build customer loyalty. Amazon Web
Services (AWS) also gives it a strong position in the cloud computing market,
making it more than just a retailer.
2. What role does innovation play in Amazon’s strategy?
Innovation is key to Amazon’s growth. From one-click ordering to same-day delivery
and Alexa smart devices, Amazon constantly introduces new technologies. AWS
itself is an innovation that turned Amazon into a tech leader. Its willingness to
experiment and invest long-term keeps it ahead of competitors.
3. What weaknesses does Amazon face?
Amazon is often criticized for poor working conditions in its warehouses and for its
impact on small businesses. It also spends heavily on innovation and infrastructure,
which means lower profit margins compared to some competitors. Regulatory
scrutiny is another weakness, as governments worldwide are investigating
Amazon’s market dominance.
4. What lessons can be learned from Amazon’s approach?
The main lesson is that putting the customer first can create strong competitive
advantages. By focusing on convenience, speed, and value, Amazon has built trust
and loyalty. Another lesson is that businesses should not be afraid to innovate in
different directions, as diversification can open up new revenue streams.
Sources:
● Stone, B. (2013). The Everything Store: Jeff Bezos and the Age of Amazon.
Little, Brown and Company.
● D’Onfro, J. (2018). Amazon Unbound: Jeff Bezos and the Invention of a Global
Empire.
Activity 3.13: Case Study Questions on McDonald’s
1. How has McDonald’s achieved a competitive advantage?
McDonald’s has mastered consistency and efficiency. Its ability to deliver the same
taste and experience worldwide builds customer trust. Standardized processes, a
strong global brand, and economies of scale let it keep prices low while serving
millions daily. Real estate ownership also gives McDonald’s an edge, since many of
its profits come from renting to franchisees.
2. What role does innovation play in McDonald’s strategy?
Although known for consistency, McDonald’s adapts to changing consumer
demands. It has added healthier options, digital ordering kiosks, delivery
partnerships, and even mobile apps to modernize its services. Innovation in
operations, such as kitchen automation, also improves speed and efficiency.
3. What weaknesses has McDonald’s faced?
McDonald’s is often criticized for contributing to unhealthy eating habits, which
affects its image. It also struggles to balance speed with quality, and its heavy
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reliance on franchisees means uneven service quality. Competition from healthier
fast-casual chains like Chipotle has also put pressure on McDonald’s to change.
4. What lessons can be learned from McDonald’s approach?
McDonald’s shows that standardization and brand recognition are powerful
competitive advantages. However, it also highlights the need for adaptation, as
even a global giant must adjust to health trends and consumer expectations. The
key lesson is to balance consistency with flexibility.
Sources:
● Love, J. F. (1995). McDonald’s: Behind the Arches. Bantam.
● Ritzer, G. (2011). The McDonaldization of Society. SAGE Publications.
Activity 3.14: Discussion Questions on IKEA
1. How has IKEA developed its competitive advantage?
IKEA’s competitive advantage comes from its ability to offer stylish, functional
furniture at affordable prices. Its flat-pack model reduces shipping and storage
costs, while self-assembly lowers labor expenses. The in-store experience, which
combines showrooms, food courts, and warehouses, also makes IKEA unique.
2. What role does innovation play in IKEA’s strategy?
IKEA constantly innovates in design and efficiency. It has pioneered cost-saving
production methods, sustainable materials, and modular designs that appeal to
changing lifestyles. Recently, IKEA has also embraced digital innovation with
augmented reality apps that let customers preview furniture in their homes.
3. What weaknesses has IKEA faced?
IKEA can be criticized for limited durability of some products, which may not suit
customers looking for long-lasting furniture. Its massive stores are not always
convenient, especially for urban customers, and navigating them can be
overwhelming. Supply chain issues, especially during global disruptions, have also
been a challenge.
4. What lessons can be learned from IKEA’s approach?
The main lesson is that a business can succeed by combining affordability with
good design. IKEA shows how innovation in logistics and customer experience can
become part of a competitive advantage. It also proves that aligning with
sustainability and lifestyle trends helps a company remain relevant.
Sources:
● Bartlett, C. A., Dessain, V., & Sjöman, A. (2006). IKEA’s Global Sourcing
Challenge: Indian Rugs and Child Labor (A). Harvard Business School Case.
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● Torelli, R. (2013). IKEA and the Cultural Patterns of International Business.
Activity 3.15: Discussion Questions on Starbucks
1. How has Starbucks developed its competitive advantage?
Starbucks built its advantage by turning coffee into an experience rather than just
a product. Its stores create a “third place” between home and work, offering a
comfortable atmosphere along with premium coffee. The company also benefits
from strong brand recognition and customer loyalty through its rewards program.
2. What role does innovation play in Starbucks’ strategy?
Innovation drives Starbucks in both products and customer experience. It
constantly introduces seasonal drinks, healthier options, and new flavors to keep
customers engaged. On the digital side, Starbucks has one of the most successful
mobile apps in retail, allowing for easy ordering, payment, and rewards tracking.
3. What weaknesses has Starbucks faced?
Starbucks has been criticized for high prices, which limit its reach among price-
sensitive consumers. It also faces competition from local coffee shops that offer
more personalized service. Rapid expansion in some markets has led to store
saturation, and issues like unionization efforts in the U.S. highlight internal
challenges.
4. What lessons can be learned from Starbucks’ approach?
Starbucks shows how a company can create a competitive advantage by focusing
on customer experience and brand identity. It teaches that people are often willing
to pay more for comfort, consistency, and community. The key lesson is that a
strong brand and customer connection can be just as valuable as the product itself.
Sources:
● Schultz, H., & Yang, D. J. (1997). Pour Your Heart Into It: How Starbucks Built
a Company One Cup at a Time. Hyperion.
● Michelli, J. (2007). The Starbucks Experience: 5 Principles for Turning
Ordinary into Extraordinary. McGraw-Hill.
Activity 3.16: Discussion Questions on Netflix
1. How has Netflix developed its competitive advantage?
Netflix gained an advantage by disrupting the traditional movie rental industry with
its subscription-based streaming model. Its focus on convenience, affordability, and
a huge content library quickly attracted millions of users. Another strength is its
recommendation algorithm, which keeps users engaged by suggesting content
based on viewing habits.
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2. What role does innovation play in Netflix’s strategy?
Innovation is at the heart of Netflix’s success. It moved from mailing DVDs to
streaming and then into producing original content like Stranger Things and The
Crown. Investing in global content also allows Netflix to reach audiences in different
cultures and languages, strengthening its global presence.
3. What weaknesses has Netflix faced?
Netflix faces rising competition from platforms like Disney+, Amazon Prime Video,
and HBO Max. Content costs are high, and losing licensed shows to competitors can
reduce its appeal. In recent years, password sharing has also hurt revenue, and
market saturation makes it harder to grow subscribers in mature markets.
4. What lessons can be learned from Netflix’s approach?
Netflix shows the importance of adapting to technology and consumer behavior. By
anticipating changes in how people consume entertainment, it has stayed ahead of
the curve. The lesson is that continuous reinvention and willingness to disrupt your
own model are key to long-term success.
Sources:
● Keating, G. (2012). Netflixed: The Epic Battle for America’s Eyeballs. Portfolio.
● Smith, G. (2021). Netflix and the Re-invention of Television. Routledge.
Activity 3.17: Discussion Questions on Uber
1. How has Uber developed its competitive advantage?
Uber changed the transportation industry by making rides accessible through a
simple mobile app. Its competitive advantage lies in convenience, dynamic pricing,
and widespread availability. By avoiding the overhead of owning cars and instead
using independent drivers, Uber was able to scale quickly in cities around the world.
2. What role does innovation play in Uber’s strategy?
Innovation has been critical for Uber’s growth. Its app introduced real-time
tracking, cashless payments, and quick ride-matching, which reshaped customer
expectations. Beyond ridesharing, Uber has also expanded into areas like food
delivery (Uber Eats) and is exploring autonomous vehicle technology for the future.
3. What weaknesses has Uber faced?
Uber has faced legal and regulatory challenges in many countries, often clashing
with taxi unions and governments. Its heavy reliance on gig workers has led to
criticism of worker rights and pay. Uber also struggles with profitability despite its
global presence, as aggressive pricing and incentives often outpace revenues.
4. What lessons can be learned from Uber’s approach?
Uber shows how technology can disrupt traditional industries, but it also highlights
the risks of rapid global expansion without addressing legal and social concerns.
The lesson is that innovation must be balanced with responsibility and sustainable
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business practices.
Sources:
● Isaac, M. (2019). Super Pumped: The Battle for Uber. W.W. Norton.
● Rogers, B. (2015). The Social Costs of Uber. University of Chicago Law Review
Dialogue.
Activity 3.18: Discussion Questions on Tesla
1. How has Tesla developed its competitive advantage?
Tesla’s edge comes from being a leader in electric vehicles (EVs). Its brand is tied
closely to innovation, sustainability, and cutting-edge technology. Tesla also
benefits from vertical integration, producing its own batteries and controlling much
of its supply chain. Its supercharger network and over-the-air software updates add
value that competitors struggle to match.
2. What role does innovation play in Tesla’s strategy?
Innovation is Tesla’s foundation. From developing long-range EV batteries to
pioneering self-driving technology, Tesla constantly pushes boundaries. Its focus on
software makes its cars more like “computers on wheels,” with continuous updates
that improve performance and add features after purchase.
3. What weaknesses has Tesla faced?
Tesla struggles with production challenges and meeting demand, often facing
delays. Its vehicles are premium-priced, limiting access for many consumers. Tesla
is also heavily dependent on Elon Musk’s leadership, which can be both a strength
and a risk, given his controversial public presence. Growing competition from
traditional automakers in the EV market is another weakness.
4. What lessons can be learned from Tesla’s approach?
Tesla shows that bold vision and willingness to disrupt an industry can create a
powerful competitive advantage. The key lesson is that companies willing to take
risks and innovate beyond industry norms can set themselves apart, even against
long-established competitors.
Sources:
● Vance, A. (2015). Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic
Future. Harper Collins.
● Stringham, E. P., Miller, J. K., & Clark, J. R. (2015). Overcoming Barriers to
Entry in an Established Industry: Tesla Motors. California Management
Review.
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Activity 3.19: Discussion Questions on Samsung
1. How has Samsung developed its competitive advantage?
Samsung’s advantage lies in its ability to compete across many product categories,
especially smartphones, semiconductors, and home appliances. Its strength is
vertical integration, as it makes many of its own components, including screens and
chips, giving it cost and supply advantages. Samsung also competes on variety,
offering products at different price points to reach both premium and budget
markets.
2. What role does innovation play in Samsung’s strategy?
Innovation is central to Samsung’s success. It was among the first to introduce
large-screen smartphones, foldable phones, and high-quality OLED displays.
Samsung invests heavily in research and development, not only to keep pace with
rivals like Apple but also to differentiate itself with unique features.
3. What weaknesses has Samsung faced?
Samsung sometimes struggles with brand loyalty compared to Apple. While it
offers innovation, its products are often quickly copied by competitors, making it
harder to maintain exclusivity. It has also faced setbacks, such as the Galaxy Note 7
battery recall, which hurt its reputation for reliability.
4. What lessons can be learned from Samsung’s approach?
Samsung shows that competing in multiple market segments and controlling key
parts of the supply chain can build a strong position. The lesson is that flexibility,
variety, and heavy investment in R&D can help a company thrive in a highly
competitive global industry.
Sources:
● Khanna, T., Song, J., & Lee, K. (2011). The Paradox of Samsung’s Rise.
Harvard Business Review.
● Lee, J. Y. (2014). Samsung Electronics and the Struggle for Leadership of the
Electronics Industry. Wiley.
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