Head Ski Company Ltd.|
Competitive Advantage Determinants
Competitive advantage in a strategic environment is most often defined as having greater profitability than the average rival firm. As in the case for Head Ski Company Inc., we are not provided with extensive competitor information, thus only internal indicators will be evaluated. Profitability measures show a company’s overall ability to maintain efficiency and performance for their stakeholders. Some of the key performance measures for Head Ski in determining a true competitive advantage are as follows: ROA, ROI, ROE or yearly comparative evaluations of Gross Profit Margin, Operating Profit Margin, and Net Profit Margin. Generic Strategy Identification
With only two high-level generic sources that ultimately lead to a competitive advantage, it is clear that Head Ski is concentrated on employing a Differentiation strategy. Head Ski provides a very unique and superior value to customers and in return, these customers are willing to pay a premium price. The specific dimensions that demonstrate a differentiation strategy for Head Ski are: Product Quality, Ski Performance, Exterior Style, and their Dealer Relations. Case Evidence
Combining his experience as an aircraft engineer with sheer dedication to skiing, Howard Head decided to simply build a ski that did not break, turned easily, and tracked correctly. He built a revolutionary product; a ski produced from metal. By disproving what many experts had believed to be the norm that a ski is only to be made of wood, Mr. Head provided a unique differentiated product to a broad market growing 20% yearly. By 1967, 60% of all high grade skis sold in the United States were now made of metal. It was clear and explicit from the case that product quality was Head’s top consideration in any decision they...