CHAPTER 2 : IDENTIFYING COMPETITIVE ADVANTAGE


COMPETITIVE ADVANTAGE
- a product or service that customers service place a greater value on the similar offerings from a competitor.

FIRST MOVER ADVANTAGE
- occurs when an organization can significantly impact its market share by being first to market with competitive advantage.

Organization watch their competition through environmental scanning.

Environmental scanning is the acquisition and analysis of event and trends.It have external and internal environment.

Internal

P - Politics
E - Economy
S - Social
T - Technology
E - Environment
L - Law

PORTER'S FIVE FORCES MODEL

1. Buyer Power
- HIGH  when buyers have many choices.
- Loyalty programs and Switching cost are the way to reduce buyer power.

2. Supplier Power
- HIGH when buyers have few choices of whom to buy from.
- supply chain is consists of all parties involved in the procurement of a produc.
-2 types of B2B ( business to business ) whcih is private exchange and reverse auction.

3. Threat of substitute products or service
-HIGH when there are many alternatives to a product.
-switching cost can make customer reluctant to change service.

4. Threat of new entrants
- HIGH when its easy for new competitor to enter the market.

5. Rivalry among the existing competitor
- HIGH when the competition is fierce in a market.

THE GENERIC STRATERGIES

- Focused stratergy

- Cost leadership

- Diffentation

Value Creation

Tools to choose stratergy
- Business Process ( processing customer's order )
- Value Chain ( views organization as a series of processes )