CHAPTER 2- IDENTIFYING COMPETITIVE ADVANTAGE

·         COMPETITIVE ADVANTAGE IS A PRODUCT OR SERVICE THAT AN ORGANIZATION’S CUSTOMER PLACE A GREATER VALUE ON THAN SIMILAR OFFERINGS FROM A COMPETITOR.

1.BUYER POWER

 HIGH- when buyer powers have many choices of whom to buy.

 LOW- choices are few.

2.SUPPLIER POWER

HIGH- when buyers have few choices of whom to buy from.

 LOW- choices are many.

3. THREAT OF SUBSTITUTE PRODUCT OR SERVICES.

HIGH- there are many alternatives to a product or services.

 LOW- few alternatives from which to choose.

4. THREAT OF NEW ENTRANTS.

HIGH- when it is easy for new competitors to enter a market.

 LOW- when there are significant entry barriers to entering a market.

5.RIVALRY AMONG EXISTENCE COMPETITORS

HIGH- when a competition is fierce in a market.

LOW- there are significant entry barriers to entering a market.

   

1.      COST LEADERSHIP

·         Becoming a low cost producer in the industry allows the company to lower prices to     customers.

·         Competitors with higher costs cant afford to compete with the low cost leader in price.

2.      DIFFERENTATION

·         Create a competitive advantage by distinguishing their products on one or more features important to their customer.

·         Unique features or benefits may justify price differences and/or stimulate demand.

3.      FOCUSED STRATEGIES

·         Target to a niche market.

·         Concentrates on either cost leadership or differentiation.

RELATIONSHIP BETWEEN BUSINESS PROCESS AND VALUE CHAIN

THE VALUE CHAINS- TARGETING BUSINESS PROCESSES.

·        Supply chain – a chain or series of processes that adds value to product and services for customer.

·        Add value to its products and services that support a profit margin for the firm.

  THANK YOU :)