this is the learning outcome for Chapter 2 : Identifying Competitive Advantages...
1. explain why competitive advantages are typically temporary????
2. list and describe each of the five force in Porter's Five Forces Model....
3. compare Porter's three generic strategies..
4. describe the relationship between business process and value chains...
to survive and thrive an organization must create a competitive advantage..that's mean,a product or service that an organization's customers place a greater value on than similar offerings from a competitor..i is temporary because the company tend to be a market follower in the business..eg : Air Asia was the first company was introduce the online ticketing..after competitive advantage,there is a first-mover advantage that occurs when an organization can significantly impact its market share by being first to market with a competitive advantage....there is a follower to compete with competitive advantage..eg : MAS become a Air Asia follower by offerings a online ticketing to their customer too....organizations watch their competition through environmental scanning..the acquisition and analysis of events and trends in the environment external to an organization...eg : Air Asia need to do environment scanning when the first-mover advantage was disappeared....
there is a 3common tools used in industry to analyze and develop competitive advantages include:
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1. Porter's Five Forces Model
# Buyer Power - analyzing the ability of buyers to directly impact the price they are willing to pay for
an item.
* ways to reduce buyer power
a. switching costs - cost that can make customer change to the another product or service.
b. loyalty program - give reward to customer that loyal to the company.
- eg : discount for AEON Jusco card
# Supplier Power - assessed by the suppliers' ability to directly impact the price that charged for
supplies.
- the reverse of buyer power.
a. supply chain - consists of all parties involved in the procurement of a product or raw material.
- eg : high when buyer have a few choices to whom to buy.
b. switching costs - to make sure customer not run to the another product or service.
# Threat of Substitute Products or Services - high when there are many alternatives to a product or
service and low when there are few alternatives from
which to choose.
a. switching costs - cost that can make customer change to the another product or service.
- eg : tea & coffee
there is a many kind of flavors and brands of tea and coffee to satisfy
the customer wants and needs.
# Threat of New Entrants - high when it is easy for new competitors to enter a market and low when
there are significant entry barriers to entering a market.
a. entry barrier - the obstacle of new product to entering a new market must compete and
survive with another product that already have in the market.
# Rivalry Among Existing Competitors - high when competition is fierce in a market and low when
competition is more complacent.
a. product differentiation - occur when a company develops unique differences in its products
with the intent to influence demand.
2. Porter's Three Generic Strategies
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eg :
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3. Value Creation
# Business Process - a standardized set of activities that accomplish a specific task.
# Value Chain - an organization as a series of processes.
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