Skip to main content

MGT300 - Chapter 2: Identifying Competitive Advantage


IDENTIFYING COMPETITIVE ADVANTAGES

To survive and thrive  an organization must create a competitive advantage
  • competitive advantage  -   a product or service that an organization's customers place a greater value on than similar offerings from a competitors
  • First-mover advantages -  occurs when an organization can significantly Impact its market share by being first to market with a competitive advantage
  • Example : Air-asia are the ticket low cost
Organization watch their competition through environment scanning
  • Environment scanning-  the acquisition and analysis of event and trends in the environment   external to an organization
Three common tools used in industry to analyze and develop and competitive advantages include
  • Porter’s  Five Forces Model
  • Porter’s three generic strategies
  • Value chains

  PORTER'S FIVE FORCES MODEL



BUYER POWER
  •  high - when buyers have many choices of whom to buy from 
  •  low - when their choices are few       
Ways to reduce buyer power is through loyalty program:
  • Loyalty program - rewards customers based on the amount of business they do with a particular organization
  • Example  : Tesco Card
  • Switching cost - costs that can make customers reluctant to switch to another product or service
    SUPPLIER POWER


1. High - when buyers have few choices of whom to buy from
2. Low - when their choices are many

     Supply chain - consists  of all parties involved in the procurement of a product or raw material
  •     can create a competitive advantages by locating alternative supply sources (decreasing supplier power) through B2B marketplace

    Two types of business-to-business(B2B) marketplaces: 
  •     Private exchnge - a single buyer posts its needs and then opens the bidding to any supplier who would care to bid
  •     Reverse auction - an auction format in which increasingly lower bids
   
     THREAT OF SUBSTITUTES PRODUCTS OR SERVICE
  •     High – when there are many alternative to a product or service
  •     Low – when there are few alternative from which to choose
  •     Switching cost – costs that can make customers reluctant to switch to another product or service

    THREAT OF NEW ENTRANTS
  •     High – it is easy for new competitors to enter a market
  •     Low -  there are significant entry barriers to entering a market
  •     Example : astro and Air-asia

   Entry Barrier
  •     A product or service feature that customers have come to expect from organization in a particular industry.
  •     Must be offered by an entering organization to compete and survive.

   RIVALRY AMONG EXISTING COMPETITORS
  •     High – when competitors is fierce in a market
  •     Low – when competition is more complacent
  •     Need to know how to create best selling in industry
  •     Example :Maxis ,Digi, Celcom and U-mobile

      Competition is always more intense in some industries  than in others, the overall trend is toward increased competitive is just about every industry.

     THE THREE GENERIC STRATEGIES - CREATING A BUSINESS FOCUS


Organization typically follow one of Porter’s Three Generic Strategies when entering a new market

     Example : 
VALUE CREATION
Once an organization choose its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategy.
  • Business process - a standardized set of activities that accomplish a specific task such as processing a customer’s order
  • Value chain - views an organization as a series of processes, each of which adds value to the product or service for each customer.

VALUE CREATION
Once an organization choose its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategy.
  • Business process - a standardized set of activities that accomplish a specific task such as processing a customer’s order
  • Value chain - views an organization as a series of processes, each of which adds value to the product or service for each customer.

Customers determine the extent to which each activity adds value to the product or service
  
The competitive advantage is to :
  • Target high value-adding activities to further enhance their value
  • Target low value-adding activities to increase their value
  • Perform some combination of the two


Comments

Post a Comment

Popular posts from this blog

MGT300 - Chapter 11: Building Customer-Centric Organization: Customer Relationship Management

1)CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ➨CRM enables an organization to : a)Provide better customer service because focus more to customer. b)Make call centers more efficient because did not have to pass phone to other. c)Cross sell products more effectively because many products. d)Help sales staff close deals faster so service will become more faster. e)Discover new customers. 2)Recency,Frequency ,and Monetary Value (RFM) ➤How recently a customer purchased items (Recency) .To recognize latest customer. ➤How frequently a customer purchased items (Frequency).To know regular customer. ➤How much a customer spends on each purchase (Monetary Value).To know who customer spend a lot. 3)The Evolution of CRM ⟹CRM reporting technology -help organizations identify their customers across other applications. ⟹CRM analysis technologies -help organizations segment their customers into categories such as best and worst customers. ⟹CRM predicting technologies-help or
5 comments
Read more

MGT300 - Chapter 10: Supply Chain Management

SUPPLY CHAIN MANAGEMENT The average company spends nearly half of every dollar that it earns on production In the past,  companies focused primarily on manufacturing and quality improvement to influence their supply chains BASIC OF SUPPLY CHAIN The supply chain has three main links: 1. Material flow from suppliers and their “upstream” suppliers al all levels 2. Transformation of materials into semi finished and finished products through the organization’s own production process 3. Distribution of products to customers at all levels List and describe the components of a typical supply chain: • Supplier’s supplier, Supplier, Manufacturer, Distributor, Retailer, Customer, Customer’s Customer INFORMATION TECHNOLOGY’S ROLE IN THE SUPPLY CHAIN             As companies evolve into extended organizations, the roles of supply chain participants are changing. It is now common for suppliers to be involved in product development and for distributors t
Post a Comment
Read more

MGT300 - Chapter 12: Integrating The Organization From The End To End - Enterprise Resource Planning

Enterprise Resource Planning (ERP) It serves as the organization’s backbone in providing fundamental decision making support. It enables people in different business areas to communicate.  ERP system helps an organization to obtain operational efficiencies, lower costs, improve supplier and customer relations, and increase revenues and market share. The heart of an ERP system is a central database that collects information from and feeds information into all the ERP system’s individual application components (called modules), supporting diverse business function such as accounting, manufacturing, marketing, and human resources.   ERP automates business processes such as order fulfillment- taking an order from a customer, shipping the purchase, and then billing for it.  ERP Integration Data Flow  ERP Process Flow  Bringing the Organization Together   ERP enables employees across the organization to share information across a single, centralized database. With exten
Post a Comment
Read more