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This week my IS 6100 students should be reading chapters 1, 2 and 13. My IS 7010 students are well into the third module of their textbook.

In this unusually long blog posting, I’ll discuss two important concepts regarding strategic management: competitive advantage and key success factors.

Microsoft has launched a marketing web site for the new Windows Vista operating system, which was released to the US retail market yesterday. It’s an unusual site. The spokesman, Demitri Martin, barely mentions computers, Microsoft or Windows Vista. The episodes, skits and comments focus on how complicated his life has become. By implication, Windows Vista offers his character hope for a less stressful life.

This is the first online ad campaign that I’ve seen with its own RSS feed, available at http://www.clearification.com/rss/. The RSS icon is also visible in the ad.

Of course, it helps to view the campaign at http://clearification.com with Microsoft’s web browser, Internet Explorer. I haven’t tried the site in Firefox or Safari, but my experience is that Microsoft’s web sites work best in IE.

As Patricia Winters Lauro of the New York times pointed out yesterday at http://www.nytimes.com/2007/01/30/business/media/30adco.html, this campaign is a stark contrast to the introduction of Windows 95 almost 12 years ago. Jay Leno was the “face” of that campaign.

Apple’s spokesmen, Justin Long and John Hodgman, are featured in hilarious television commercials that can be viewed at http://apple.com/getamac

(And just for the record, I use a Mac and a Windows PC.)

For my IS 6100 students, these marketing campaigns are interesting examples of concepts discussed in Chapter 2. (My IS 7010 students might find this blog post helpful, too.) Microsoft is the dominant provider of desktop computer software. Some of Microsoft’s competitive advantages rely upon the ubiquity of the company’s products and services. Almost every business uses Microsoft Office. Most universities in the US have standardized on this productivity suite, too. Most personal computers come with a version of Microsoft Windows preinstalled.

A competitive advantage gives an organization enhanced capabilities for developing and delivering strategic value. Companies should have several competitive advantages that are complementary, difficult to copy, and sustainable over the long-term. I believe that companies rent, not own, their competitive advantages.

Apple has managed to increase its market share with the successful introduction of Intel-powered computers to its product line. Apple has developed and maintained competitive advantages in the areas of usability and product design. The Macintosh and iPod are two good examples.

• http://en.wikipedia.org/wiki/Macintosh
• http://www.macteens.com/gallery/displayimage.php?pid=3645&fullsize=1

Over the last year, Apple has used its new Intel CPUs to offer enhanced compatibility with the Wintel (Windows/Intel) computing platform. There are several software packages available that let Intel Macintosh users install and run Microsoft Windows applications. Apple’s Boot Camp, Parallels and CrossOver Mac are three examples that I’ve evaluated. Some of these packages run faster than traditional Windows-based computers.

• http://www.apple.com/bootcamp/
• http://www.parallels.com/products/desktop/
• http://www.codeweavers.com/products/cxmac/

It’s no surprise that Apple’s market share in the desktop computer industry has risen over the last few years. By one recent estimate cited in http://www.applematters.com/index.php/section/comments/1788/, Apple now has 5% of the US desktop computer market.

At the same time, both Microsoft and Apple must address several key success factors (KSFs) in the desktop computer industry. Over time, a company’s competitive advantage may be copied, rendered less valuable, or otherwise converted into KSFs. Companies rent their competitive advantages (CAs), just as companies rent market share. Neither CAs nor KSFs can be bought and owned outright.

There’s a good list of KSFs for online retailers at http://retailindustry.about.com/library/bl/bl_yg0309.htm

Keep in mind that in most industries, there are only a few KSFs, and these tend to show up in SWOT analyses as strengths or weaknesses of specific companies in that industry. Here’s a PDF file that summarizes some important ideas about SWOT analysis. There’s some more information on pp 419-420 in the IS 6100 textbook. I’ve also posted a PDF file about SWOT analysis here.

As an example, support for Universal Serial Bus (USB) devices was a novelty in 1998. The original version of Windows 98 shipped without USB support. To this day, many hardware manufacturers include install disks with Windows 98 drivers for their devices.

Today, USB support is considered essential in any desktop computer and operating system. Customers might ignore a computer manufacturer or operating system supplier that does not include USB support in their products, unless that product has compelling features that obviate the need for USB.

My favorite example of a KSF is in the elevator industry. Most building owners and maintenance departments cannot provide specialized service for their building’s elevators. Therefore, elevator companies like Otis and Thyseen-Krupp provide 24/7 repair service. It’s expensive, but it’s necessary to support customers. No one wants to wait for a broken elevator or be stuck in a broken elevator.

• http://www.otis.com/otis
• http://www.thyssenkruppelevator.com/
• http://inventors.about.com/library/inventors/blelevator.htm

Please note that KSFs are more specific versions of critical success factors (CSFs), which are discussed in Chapter 10 of O’Brien & Marakas. (379-380).

Here is a helpful PPT file about the five forces and value chain models. I fixed this link on February 2 at 14:45 HT.