chapter 2!!!!

salam smua... :)

mggu nie kt0rng dh abes study chapter 2 (identifying competitive advantages). 

1. identifying competitive advantages is 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 competitor
• first-mover advantage : occurs when an organization can significantly impact its market share by being first to market with a competitive advantage.

organizations watch their competition through environmental scanning

• environmental scanning : the acquisition and analysis of events and trends in the environment external to an organization.

three common tools used in industry to analyze and develop competitive advantages include:

• Porter's Five Forces Model
• Porter's three generic strategies
• Value chain

     2. the five forces model-Evaluating business segments

Porter's Five Forces Model determines the relative attractiveness of an industry. 

Rivalry among existing competitors  >> 

1. Buyer Power assessed by analyzing the ability of buyers to directly impact the price they are willing to pay. 

• ways to reduce buyer power : - switching costs - costs that can make customer reluctant.

                                                        -loyalty program - rewards customers based on the amount.

     2.  Supplier Power assessed by the suppliers' ability to directly impact the price.

          Supply chain consists of all parties involved in the procurement of a product or raw material.

    3.  Threat of Substitute Products or Services is high when there are many alternatives to a    product/services and low when there are few alternatives from which to choose.

    4.  Threat of New Entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market. 

    5.  Rivalry Among Existing Competitors is high when competition is fierce in a market and low when competition is more complacent.

• product differentiation occurs when a company develops unique differences in its products with the intent to influence demand.

    6.  The Three Generic Strategies - Creating A Business Focus

Organizations typically follow one of Porter's three generic strategies when entering a new market.

    7.  Value Chain

• 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.
• combining Porter's Five Forces and three generic strategies create business strategies for each segment.