Assalamualaikum & Goodnight for Malaysians and Good day for the world,
Hey bloggers, It is kind of late for me to update upon Chapter 2 because its already week 4 since my madame assigned this assignment since week 1 but yeah, its my human negative character traits. Ain’t a good example yes. Tomorrow on 27th December 2016 would be my next step in Chapter 3 for Week 4 in my class.
So here we are Chapter 2, as far as Iam concerned from my learning outcomes, a company must identify their competitive advantages strive for better sales and profit.
Why do we need to identify our competitive advantages?
To survive and thrive an organization
What is a competitive advantage?
A product or service that an organization’s customers place a greater value on than similar offerings from a competitor.Before competitive advantage occurs, such First-mover advantage was made which is…
An organization can significantly impacts its market share by being the first to market with a competitive. For example : A&W Malaysia Berhad
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| Malaysia's first fast food restaurant at Kelana Jaya |
Most organizations watch their competition through environmental scanning which Is the acquisition and analysis of events and trends in the environment external to an organization.
The common tools used in industry to analyze and develop competitive advantages include :
A.) Porter’s Five Forces Model
1. Buyer Power
Its high in its power when buyers have many choices of whom to buy from and low upon vice versa.
There two ways to reduce buyer powers which are :
Loyalty Program
This is where company rewards customers based on the amount of business they did with the company. For example AEON
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| Aeon companies loyalty towards their customers |
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| Aeon companies loyalty towards their customers |
Switching Cost
This is when costs that can make customers reluctant to switch to another product or service. For example APPLE
2. Supplier power
Its high in its power when buyers have a few choices to whom to buy from and low upon vice versa.
This concludes of supply chain which includes all parties involve in the procurement of a product or raw material :
Supplies – Organizations – Customers
Significant example in Malaysia is ASTRO
Most organizations that are buying goods and services through supply chain can create a competitive advantage by locating alternative supply sources through B2B Marketplaces
What is B2B Marketplaces?
An internet-based service that brings together many buyers and sellers. This as well includes the private exchange and reverse auction.
3. Threat to substitute products or services
Its power is high when there many alternatives to a product or service and low when there are few alternatives from which to choose through switching cost where customer would reluctant to switch to another product or services due to its cost
For example : Apple towards Samsung
4. Threat of new Entrants
Its power 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
Its high when competition is fierce in a market and vice versa
For example : Dunia Herbs Vs Qu Puteh
B.) The Three Generic Strategies
1. Cost leadership
2. Differentiation
3. Focused Strategy
C.) Value Creation
After choosing one of the strategy, the organization must meets its value creation through:
1. Business Process
2. Value Chain
Thanks for reading….
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