MGT 300..IDENTIFYING COMPETITIVE ADVANTAGES..

Assalamualaikum...

Today, I will discuss about chapter 2..This chapter tell us how to operate an organization and what is the barriers when enter to the market..
First, Organization must create a competitive advantages in order to survive and thrive the organization..What is the mean of competitive advantages??COMPETITIVE ADVANTAGES is a product or services that an organization's customers place a greater value on that similar offerings..Eg: Air Asia offer tickets with a low price..
When organization significantly impact its market share by being first to market with a competitive advantages, they actually be a FIRST MOVER ADVANTAGES..Its only for temporary..Organization watch their competition through Environmental Scanning..ENVIRONMENTAL SCANNING is analysis of events and trends in the environment external to an organization..This process is more important to achieve a competitive advantages..
How organization can develop a competitive advantages by used 3 common tools which is :-

• PORTER'S FIVE FORCES MODEL - It means the relative attractiveness of an industry..
• Buyer Power - by analyzing the ability of buyers directly impact the price..
• Switching Cost - cost that make customer reluctant to switch to another product or services.
• Loyalty Program - rewards customer based on the amount of business..

• Supplier Power - the suppliers ability to directly impact the price they are charging for supplies..
• Threat of Substitute Products or Services - 
• High (when there are many alternatives)
• Low (when there are few alternatives)

• Threat of New Entrants - 
• High (when easy for new competitors to enter a market)
• Low (when they are barriers to entering a market)

• Rivalry Among Existing Competitors -
• High (when competition is fierce)
• Low (when competition is more complacent)

We can produce a product based on this strategies:-

• PORTER'SS THREE GENERIC STRATEGIES - Typically follow one of Porter's three generic strategies when entering a new market..Including 3 which is :
• Cost Leadership
• Differentiation
• Focused Strategy

• VALUE CHAIN - views organization as a series of processes,each of which adds value to the product for each customer.

That's all for this entry,later I will discuss for another chapter in coming soon..:-)